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.

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 activity rate for warranty work based on warranty hours. (Note: Round answer to the nearest dollar.)

	a.	$255 per hour
	b.	$262 per hour
	c.	$287 per hour
	d.	$268 per hour
	e.	$264 per hour