Bubble Fast Ltd (BFL) is a civil engineering company. Currently it has a few projects in...

  

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Bubble Fast Ltd (BFL) is a civil engineering company. Currently it has a few projects in progress. In order to improve operational efficiency and maintain competitiveness, the chief operating officer has instructed the chief accountant, John Smith, to evaluate the supplier costs. John and his accounting team has identified the activity drivers, and estimated the cost per unit of activity driver for 2018. The following are the related information: Cost per unit of activity driver $125 per order $90 per delivery $150 per delivery $100 per unit reworked $110 per return $95 per invoice $280 per dispute Activity Order material Receive order Inspect order Downtime due to poor quality material Return material to supplier Pay supplier Dispute invoice amount BFL has three major suppliers who are supplying a substantial amount of the supplies of the company. The activity details are as follow: Activity Ace Venture Ltd Best Venture Ltd Crest Venture Ltd (CVL) (AVL) 5 (BVL) 4 Return material to supplier Pay supplier Dispute invoice amount Units reworked Order material 15 12 48 12 2 13 10 2 40 48 30 Receive order 40 60 38 Inspect order 40 60 38 In addition, a supplier relationship manager, who was given a salary of $90,000 per annum, was employed. It is estimated that 20 per cent of his time was spent serving AVL, 60 percent on BVL and the remaining 20 per cent on CVL. The cost of material purchased from each supplier was as follows: $60,000 $75,000 $37,000 AVL BVL CVL Answer template: (a) Cost per unit of activity driver AVL BVL CVL No, of No. of No. of activitie $ 2$ Activity Rework due to poor quality material activities activities Order material Receive order Inspect order Return material Pay supplier Dispute invoiced amount Supplier relationship 20% 60% 20% manager $35 850 $79 400 $37 500 Total supplier costs (A) Purchase cost (B) $60 000 $75 000 $37 000 b. Performance index (A/B) (b) Based on the answers above: Activity How to reduce them? Return material to supplier Pay supplier Dispute invoice amount Units reworked Order material Receive order Inspect order Bubble Fast Ltd (BFL) is a civil engineering company. Currently it has a few projects in progress. In order to improve operational efficiency and maintain competitiveness, the chief operating officer has instructed the chief accountant, John Smith, to evaluate the supplier costs. John and his accounting team has identified the activity drivers, and estimated the cost per unit of activity driver for 2018. The following are the related information: Cost per unit of activity driver $125 per order $90 per delivery $150 per delivery $100 per unit reworked $110 per return $95 per invoice $280 per dispute Activity Order material Receive order Inspect order Downtime due to poor quality material Return material to supplier Pay supplier Dispute invoice amount BFL has three major suppliers who are supplying a substantial amount of the supplies of the company. The activity details are as follow: Activity Ace Venture Ltd Best Venture Ltd Crest Venture Ltd (CVL) (AVL) 5 (BVL) 4 Return material to supplier Pay supplier Dispute invoice amount Units reworked Order material 15 12 48 12 2 13 10 2 40 48 30 Receive order 40 60 38 Inspect order 40 60 38 In addition, a supplier relationship manager, who was given a salary of $90,000 per annum, was employed. It is estimated that 20 per cent of his time was spent serving AVL, 60 percent on BVL and the remaining 20 per cent on CVL. The cost of material purchased from each supplier was as follows: $60,000 $75,000 $37,000 AVL BVL CVL Answer template: (a) Cost per unit of activity driver AVL BVL CVL No, of No. of No. of activitie $ 2$ Activity Rework due to poor quality material activities activities Order material Receive order Inspect order Return material Pay supplier Dispute invoiced amount Supplier relationship 20% 60% 20% manager $35 850 $79 400 $37 500 Total supplier costs (A) Purchase cost (B) $60 000 $75 000 $37 000 b. Performance index (A/B) (b) Based on the answers above: Activity How to reduce them? Return material to supplier Pay supplier Dispute invoice amount Units reworked Order material Receive order Inspect order

Answer rating: 100% (QA)

Particulars Amount per AVL BVL CVL Rework 100 1000 0 200 Order Material 125 5000 6000 37... View the full answer