Figure 7-3

question 74

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 cost per component associated with using Bello Company as the supplier.

• A) $12.00
• B) $8.95
• C) $84.26
• D) $15.74
• E) $86.25

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Definitions:

Labor Input

The quantity of labor employed in the production of goods and services, usually measured in hours worked or number of workers.

High Productivity

A state of achieving significantly greater output per unit of input, reflecting an efficient and effective utilization of resources.

Large Amount

A term used to indicate a significantly high quantity or volume of something.

Output Produced

The total quantity or amount of goods and services produced by a business, industry, or economy.