Fame Company manufactures engines. Fame 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 late. Hydra sells the component for $12.00 per unit,

while Parable sells the same component for $10.00 per unit. Fame purchases 80% of its components

from Parable because of the lower price it offers. The total annual demand is 95,000 units.

I. Activity Data
	Activity Cost
Inspecting components (sampling only)	$ 210,000
Reworking products (due to failed component)	$2,454,000
Warranty work (due to failed component)	$1,923,000

II. Supplier Data
	Hydra	Parable
	International	Company
Unit purchase price	$12.00	$10.00
Units purchased	19,000	76,000
Sampling hours	60	2,600
Rework hours	150	3,800
Warranty hours	550	7,000

Calculate the total activity cost per component associated with using Hydra International as the supplier.

(Note: Round the activity rates to the nearest dollar and the cost per component to two decimal places.)

Group of answer choices

A. $15.75

B. $10.00

C. $24.53

D. $20.00

E. $22.80