Figure 7-3. Hamilton Company manufactures engines.Hamilton produces all the parts necessary for its engines except for one electronic component,which is purchased from two local suppliers: Traynor Inc.and Bello Company.Both suppliers are reliable and rarely deliver late; however,Traynor sells the component for $10.00 per unit and Bello sells the same component for $8.95.Hamilton purchases 70 percent of its components from Bello,because of the lower price.The total annual demand is 75,000 units.
Refer to Figure 7-3.Calculate the total activity cost per component associated with using Traynor Inc.,as the supplier.
A)$15.75
B)$10.00
C)$19.38
D)$20.00
E)$22.80

Question

Figure 7-3. Hamilton Company manufactures engines.Hamilton produces all the parts necessary for its engines except for one electronic component,which is purchased from two local suppliers: Traynor Inc.and Bello Company.Both suppliers are reliable and rarely deliver late; however,Traynor sells the component for $10.00 per unit and Bello sells the same component for $8.95.Hamilton purchases 70 percent of its components from Bello,because of the lower price.The total annual demand is 75,000 units.
  Refer to Figure 7-3.Calculate the total activity cost per component associated with using Traynor Inc.,as the supplier.
A)$15.75 
B)$10.00 
C)$19.38 
D)$20.00 
E)$22.80

Quizplus · Accepted Answer

The Answer of Figure 7-3. Hamilton Company manufactures engines.Hamilton produces all the parts necessary for its engines except for one electronic component,which is purchased from two local suppliers: Traynor Inc.and Bello Company.Both suppliers are reliable and rarely deliver late; however,Traynor sells the component for $10.00 per unit and Bello sells the same component for $8.95.Hamilton purchases 70 percent of its components from Bello,because of the lower price.The total annual demand is 75,000 units.
  Refer to Figure 7-3.Calculate the total activity cost per component associated with using Traynor Inc.,as the supplier.
A)$15.75 
B)$10.00 
C)$19.38 
D)$20.00 
E)$22.80