Fame Company manufactures engines. Fome produces all the parts necessary for its engines, except for...
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Fame Company manufactures engines. Fome produces all the parts necessary for its engines, except for one electronic component, which is purchased from two local suppliers: Hydra International and Parable Company. Both suppliers are reliable and rarely deliver fate. Hydra sells the component for $12.00 per unit, while Parable sells the same component for $10.00. Fame purchases 80% of its components from Parable because of the lower price it offers. The total annual demand is 95,000 units 1. Activity Data Impecting components (sampling only Reworking products (due to falled component) Warranty work (due to failed component) Activity Cost $ 210,000 $2,454,000 $1,923,000 IL Supplier Data Unit purchase price Units purchased Sampling hours Rework hours Hyde International $12.00 19,000 60 150 550 Parable Comeny $10.00 76,000 2.000 3,800 7,000 Warranty hours Calculate the activity rate for inspecting components based on sampling hours. (Note: Round answer to the nearest dollar)
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