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Raceway Company manufactures engines. Raceway produces all the parts necessary for its engines, except for one electronic component, which is purchased from two local
Raceway Company manufactures engines. Raceway 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 per unit, while Parable sells the same component for $10 per unit. Raceway 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 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 Unit purchase price Units purchased Sampling hours Rework hours Warranty hours Hydra International Parable Company $12 $10 19,000 76,000 60 2,600 150 550 3,800 7,000 What is the total purchasing cost per unit associated with using Hydra International as the supplier? (Round activity rates to the nearest dollar and cost per unit to two decimal places.)
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1 Activity Rates Calculation Inspecting Components The cost for inspecting components is 210000 and ...Get Instant Access to Expert-Tailored Solutions
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