Figure 7-3

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 percent 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 activity rate for reworking products based on rework hours.Round to the nearest whole dollar.

A) $599 per hour
B) $595 per hour
C) $602 per hour
D) $605 per hour
E) $622 per hour