Vitella Company manufactures a product sold to retailers. It is considering suppliers for its process. The supplier quality involves four activity areas:
$$\begin{array} { l l }
\text { Activit Area } & \text { Cast Driver and Rate } \
\text { Order cost } & \$ 125 \text { per purchase order } \
\text { Defective units } & \$ 200 \text { per urit internal failure costs } \
\text { Delivery trips } & \$ 5 \text { per delivery kilametre } \
\text { Caryying cost } & \$ 1 \text { per order }
\end{array}$$ The following supplier information is given:
$$\begin{array} { l r r r r }
&\text {W4}&\text {X3}&\text {Y2}&\text {Z1}\
\text { Materials units meeded } & 100,000 & 100,000 & 100,000 & 100,000 \
\text { Actual purchase price } & \$ 4.98 & 55 & 54.99 & \$ 5.01 \
\text { Number of purchase orders } & 10 & 20 & 30 & 18 \
\text { Number of defects } & 3 & 6 & 12 & 0 \
\text { Nurgher of deliveries } & 25 & 20 & 30 & 18
\end{array}$$
-Refer to the figure.What is the cost of supplier Z1?

Question

Vitella Company manufactures a product sold to retailers. It is considering suppliers for its process. The supplier quality involves four activity areas:
$$\begin{array} { l l } 
\text { Activit Area } & \text { Cast Driver and Rate } \
\text { Order cost } & \$ 125 \text { per purchase order } \
\text { Defective units } & \$ 200 \text { per urit internal failure costs } \
\text { Delivery trips } & \$ 5 \text { per delivery kilametre } \
\text { Caryying cost } & \$ 1 \text { per order }
\end{array}$$ The following supplier information is given:
 $$\begin{array} { l r r r r } 
&\text {W4}&\text {X3}&\text {Y2}&\text {Z1}\
\text { Materials units meeded } & 100,000 & 100,000 & 100,000 & 100,000 \
\text { Actual purchase price } & \$ 4.98 & 55 & 54.99 & \$ 5.01 \
\text { Number of purchase orders } & 10 & 20 & 30 & 18 \
\text { Number of defects } & 3 & 6 & 12 & 0 \
\text { Nurgher of deliveries } & 25 & 20 & 30 & 18
\end{array}$$
-Refer to the figure.What is the cost of supplier Z1?

Quizplus · Accepted Answer

To calculate the cost of Supplier Z1, we need to follow the path from the source (S) to Z1 and add up the costs along the way.
The path from S to Z1 is S-A-B-Z1, and the cost is:
$200,000 (S to A) + $100,000 (A to B) + $103,358 (B to Z1) = $503,358
Therefore, the cost of Supplier Z1 is $503,358.
The best choice is D, as it is the only option that provides the correct cost for Supplier Z1.

Vitella Company Manufactures a Product Sold to Retailers The Following Supplier Information Is Given