Hamilton company manufactures engines hamilton produces all

Reference no: EM13598424

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.

I. Activity Data

Activity Cost
Inspecting components (sampling only)                        $190,000
Reworking products (due to failed component)             $2,254,000
Warranty work (due to failed component)                     $1,723,000

II. Supplier Data
                                 Traynor, Inc.                 Bello Company
Units Purchase Price                 $10.00                 $8.95
Units Purchased                        22,500                       52,500
Sampling Hours                               50                         2,450
Rework Hours    135                     3,625
Warranty hours                            475                         6,000

A. Calculate the activity rate for inspecting components based on sampling hours.
B. Calculate the activity rate for reworking products based on rework hours.
C. Calculate the activity rate for warranty work based on warranty hours.

The answers are below I just need to understand the steps to getting the answers so please show your work

The answers to question A is $76 per-hour
The answer to Question B is $559 per-hour
The answer to Question C is $266 per-hour

Reference no: EM13598424

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