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 warranty work based on warranty hours.Round to the nearest whole dollar.

A) $268 per hour
B) $266 per hour
C) $264 per hour
D) $262 per hour
E) $287 per hour