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 International Parable 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 cost per component associated with using Parable Company as the supplier. (Note: Round the activity rates to the nearest dollar and the cost per component to two decimal places.)

A. $12.45

B. $78.92

C. $67.24

D. $15.74

I know the answer is C because there is an answer key, but how do you get C?