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II. Supplier data: Unit purchase price Harvey Curtis $66 $59 47,000 141,000 270 Units purchased Expediting orders 20 Sampling hours Rework hours 70 260 320 4,440 4,280 5,680 Warranty hours * The Quality Control Department indicates that sampling inspection for the Harvey component has been reduced because the reject rate is so low. Required: 1. Calculate the cost per component for each supplier, taking into consideration the costs of the quality- related activities and using the current prices and sales volume. If required, round your unit cost answers to the nearest cent. Harvey Curtis Purchase cost Inspecting components Expediting work Reworking products Warranty work Total supplier cost Units supplied Unit cost Given this information, what do you think the purchasing manager ought to do? 2. The Quality Control Department estimates that the company loses $3,228,000 in sales per year because of the reputation effect of defective units attributable to failed components. Suppose that you had to assign the cost of lost sales to each supplier using one of the drivers already listed. Which would you choose? Using this driver, calculate the change in the unit cost of the Curtis carburetor attributable to lost sales. If required, round your answer to the nearest cent. per unit

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