Bison Creek Company Is Preparing Its Annual Profit Plan Required:
A

Essay

Bison Creek Company is preparing its annual profit plan. As part of its analysis of the cost of its purchasing activity, management estimates that the $250,000 for purchasing support should be assigned to the individual vendors from the information given as follows:
$$\begin{array} { | l | r | r | r | } \hline & \text { Vendor A } & \text { Vendor B } & \text { Vendor C } \\\hline \text { Units purchased } & 100,000 & 100,000 & 500,000 \\\hline \text { Purchase orders (annual) } & 12 & 24 & 50 \\\hline \text { Number of shipments received } & 12 & 52 & 100 \\\hline\end{array}$$
Required:
a. Allocate the purchasing costs to the three vendors, assuming Bison Creek uses units purchased to compute activity-based costs.
b. Allocate the purchasing costs to the three vendors, assuming Bison Creek uses purchases orders to compute activity-based costs.
c. Allocate the purchasing costs to the three vendors, assuming Bison Creek uses number of shipments to compute activity-based costs.