Activity Cost II Supplier Data -Refer to Tigra Company

question 93

Multiple Choice

Activity Cost $$\begin{array} { l l } \text { Inspecting comp onents (sampling only) } & \$ 190,000 \\\text { Reworking products (due to failed component) } & \$ 2,254,000 \\\text { Warranty work (due to failed component) } & \$ 1,723,000\end{array}$$ II. Supplier Data $\begin{array}{lrr}&\text { Supplier } 1 &\text { Supplier } 2\\\text { Units Purchase Price } & \$ 10.00 & \$ 8.95 \\\text { Units Purchased } & 22,500 & 52,500 \\\text { Sampling Hours } & 50 & 2,450 \\\text { Rework Hours } & 135 & 3,625 \\\text { Warranty Hours } & 475 & 6,000\end{array}$
-Refer to Tigra Company. What is the total cost per component associated with using Supplier 2?

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

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Definitions:

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Loanable Funds

Describes the market where savers provide funds to borrowers, influencing interest rates through supply and demand.

Usury Law

Usury laws are regulations governing the interest rates that can be charged on loans, designed to protect consumers from exorbitant rates and predatory lending practices.

Loanable Funds

The market where savers supply funds for loans to borrowers, influenced by interest rates and government policies.