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 cost per component associated with using Bello Company as the supplier.
A)$12.00
B)$8.95
C)$84.26
D)$15.74
E)$86.25

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 cost per component associated with using Bello Company as the supplier.
A)$12.00 
B)$8.95 
C)$84.26 
D)$15.74 
E)$86.25

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 cost per component associated with using Bello Company as the supplier.
A)$12.00 
B)$8.95 
C)$84.26 
D)$15.74 
E)$86.25