Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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:

image text in transcribed
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. 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 Inspecting components (sampling only) Reworking products (due to failed component) Warranty work (due to failed component) Activity Cost $ 210,000 $2,454,000 $1,923,000 II. Supplier Data Hydra International $12.00 Unit purchase price Units purchased Sampling hours Rework hours Warranty hours 19,000 60 Parable Company $10.00 76,000 2,600 3,800 7,000 150 550 Calculate the activity rate for warranty work based on warranty hours. (Note: Round answer to the nearest dollar) 3. $262 per hour b. 3264 per hour c. $268 per hour

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Government And Not For Profit Accounting Concepts And Practices

Authors: Michael H. Granof, Saleha B. Khumawala, Thad D. Calabrese

9th Edition

1119803896, 978-1119803898

More Books

Students also viewed these Accounting questions

Question

What is an emerging economy?

Answered: 1 week ago

Question

Please brief the case Supply Chain Assocs. v. ACT Electronics

Answered: 1 week ago