Fame Company manufactures engines. Fame manufactures all the necessary parts for its engines, except for one electronic component 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 buys 80% of its components from Parable because of the low price it offers. Total annual demand is 95,000 units. I. Efficiency Data Efficiency Cost Inspection of components (sampling only) $210,000 Rework products (due to defective component) $2,454,000 Warranty work (due to defective component) $1,923,000 II. Supplier Data Hydra Parable International Company Unit purchase price $12.00 $10.00 Number of 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 product rework based on rework hours. (Note: Round answer to nearest dollar.) a. $622 per hour b. $602 per hour c. $621 per hour d. $605 per hour e. $595 per hour

6.

Sole proprietor John Wilson has the following forecast figures for next year:

unit selling price	200,00 $
Contribution per unit	50.00
Total fixed costs	700.000

What is the contribution rate? (Note: Round answer to three decimal places.)

7.

The Fame Company manufactures engines. Fame manufactures all the necessary parts for its engines, except for one electronic component 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 buys 80% of its components from Parable because of the low price it offers. Total annual demand is 95,000 units.

I. Activity Data
	Activity Cost
Examine components (sampling only)	210.000 $
Rework products (due to failed component)	2.454.000 $
Warranty work (due to defective component)	1.923.000 $

II. Supplier Data
	Hydra	comparison
	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 ratio to examine components based on sampling hours. (Note: Round answer to nearest dollar.)