Activity-based costing system: ABC

>< Traditional costing system: use only one/two allocation bases: Machine hours/labor hours / units

Pty Ltd. Hardy Saucepans Corporation manufactures and sells saucepans and other kitchen equipment directly to
customers, as well as to retail stores. To produce its saucepan set, the company purchases raw materials and
components from a range of suppliers. We will focus on the two suppliers of the plastic handles for the standard
saucepan sets: Plastex Industries and Handles Ltd.Hardy Saucepans has been ordering the plastic handles from both
suppliers for many years. Hardy Saucepans retain two suppliers for this component as it believes this practice is less
risky than relying on a single supplier that might sometimes experience delivery or quality problems. Most orders are
placed with Plastex Industries, as it charges only $2 per handle , whereas Handles Ltd charges $2.2 per handle. In the
past year, Hardy Saucepans purchased a total of 10,000 units from Pastex and 6,000 units from Handles Ltd. The
accountant and the

Nhìn sơ quá cứ nghĩ Plasrtex sẽ giúp mình tiết kiệm nhiều chi phí hơn do nó có giá(2$) rẻ hơn so với Handles(2,2$)

Activity Cost per unit of activity driver Number of activities

Plastex Handles
Unit level
- Rework product due to poor-quality $50/unit reworked 45 5
material
- Downtime due to poor-quality material $45/ hour of downtime 30 4
- Store inventory $28/ unit stored/year 200 100
Order level
- Place purchase order $120/order 12 10
- Receiving a delivery $80/delivery 60 45
- Inspect material $40/delivery 60 45
- Receive and inspect late deliveries $250/late delivery 10 1
Supplier level
- Supplier relationship manager $25,000/supplier v
- Supplier audit $12,000 (Plastex)
- $6,000 (Handles) v
- R&D $25,000 (Plastex) v
 Activities Plastex Handles
Total units purchased 10010000 6000
Purchase price per unit 2 2,2
Supplier activity costs
Unit level
- Rework product due to poor- =50*45=225 2500
quality material 0
- Downtime due to poor-quality =45*30=135 180
material 0
- Store inventory 5600 2800
Order level
- Place purchase order 1440 1200
- Receiving a delivery 4800 3600
- Inspect material 2400 1800
- Receive and inspect late deliveries 2500 250
Supplier level
- Supplier relationship manager 25000 25000
- Supplier audit 12000 6000
- R&D 25000 0
Total supplier activity costs 82340 41080
Total supplier activity cost per unit 8 ,8,234234 6,847
Total cost of ownership per unit 10,234 9,047
 Handles tiết kiệm chi phí cho mình hơn.