Lissen Phones uses Alpha Electronics and La Paz Company to buy two electronic components used...
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Accounting
Lissen Phones uses Alpha Electronics and La Paz Company to buy two electronic components used in the manufacture of its cell telephones.
Component 125X and Component 30Y. Consider two activities: testing and reordering components. After the two components are inserted,
testing is done to ensure that the two components in the telephone are working properly. Reordering occurs because one or both of the components have
failed the test and it is necessary to replenish components inventories. Activity cost information and other data needed for supplier costing are as follows.
Activity costs caused by suppliers (testing failures and reordering as a result):
Activity
Cost
Testing components
$1,500,000
Reordering components
$375,000
Supplier data:
-
Alpha Electronics
La Paz Company
125X
30Y
125X
30Y
Unit purchase price
$10.00
$26.00
$12.00
$28.00
Units purchased
150,000
75,000
18,750
18,750
Units that failed tests
1,500
975
13
12
Number of reordes
75
50
0
0
Determine the cost of each supplier by using ABC. Round unit cost to two decimal places.
Alpha Electronics
La Paz Company
Component
Cost
Component
Cost
125X
125X
30Y
30Y
Total Cost
Total Cost
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