Figure 7-3

question 54

Multiple Choice

Figure 7-3.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% of its components from Bello, because of the lower price. The total annual demand is 75,000 units.
-Refer to Figure 7-3. Calculate the total activity cost per component associated with using Traynor Inc., as the supplier.

• A) $15.75
• B) $10.00
• C) $19.38
• D) $20.00
• E) $22.80

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Definitions:

Duty of Notification

The obligation to inform or update relevant parties about important information or changes.

Constructive Information

Constructive information refers to knowledge that one is presumed by law to have, often because it is a matter of public record or because one should have discovered it by due diligence.

Specific Performance

A legal remedy requiring a party to perform their part of a contract, rather than paying damages for not fulfilling the contract.

Computer Program

A computer program is a set of instructions that a computer follows to perform specific tasks or operations, written in a programming language.