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Blackburn Inc uses Otavalo Manufacturing and Piura Company to buy two precision machined parts used in the manufacture of its permanent-magnet motors Part #625 and Part #827 Consider two activities

Blackburn Inc. uses Otavalo Manufacturing and Piura Company to buy two precision machined parts used in the manufacture of its permanent-magnet motors: Part #625 and Part #827. Consider two activities: testing parts and reordering parts. After the two parts are inserted, testing is done to ensure that the two parts work as intended. Reordering occurs because one or both of the parts have failed the test and it is necessary to replenish part inventories. Activity cost information and other data needed for supplier costing are as follows: I. Activity Costs Caused by Suppliers (testing failures and reordering as a result) Activity Costs Testing parts........................$4,500,000 Reordering parts......................1,125,000 II. Supplier Data Required: Determine the cost of each supplier by using ABC. Round unit costs to two decimal places.

Jun 19 2020 View more View Less

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