Activity$-$Based Supplier Costing

Clearsound uses Alpha Electronics and La Paz Company to buy two electronic components used in the manufacture of its cell phones: Component $125$X and Component $30$Y$.$ Consider two activities: testing components and reordering components. After the two components are inserted, testing is done to ensure that the two components in the phones are working properly. Reordering occurs because one or both of the components have failed the test and it is necessary to replenish component 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$)$

$\backslash$table$[[$Activity$,$Costs$],[$Testing components,$$1,200,000$