Hamilton Company manufactures engines. Hamilton produces all the parts necessary for its engines except for one electronic component, which is purchased from two local suppliers: Traynor, Inc. and Bello Company. Both suppliers are reliable and rarely deliver late; however, Traynor sells the component for $10.00 per unit and Bello sells the same component for $8.95. Hamilton purchases 70 percent of its components from Bello, because of the lower price. The total annual demand is 75,000 units.

I. Activity Data
	Activity Cost
Inspecting components (sampling only)	$190,000
Reworking products (due to failed component)	$2,254,000
Warranty work (due to failed component)	$1,723,000

II. Supplier Data
	Traynor, Inc.	Bello Company
Units Purchase Price	$10.00	$8.95
Units Purchased	22,500	52,500
Sampling Hours	50	2,450
Rework hours	135	3,625
Warranty hours	475	6,000

Calculate the activity rate for inspecting components based on sampling hours.

		$78 per hour
		$72 per hour
		$76 per hour
		$80 per hour
		$77.55 per hour