Activity Availability, Capacity Used, Unused Capacity
Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each agent is paid $80,000 per year and is able to process 8,000 purchase orders. Last year, 35,600 purchase orders were processed by the five agents.
Required:
1. Calculate the activity rate per purchase order.
$ per purchase order
2. Calculate, in terms of purchase orders, the:
| a. |
Total activity availability |
purchase orders |
| b. |
Unused capacity |
purchase orders |
3. Calculate the dollar cost of:
| a. |
Total activity availability |
$ |
| b. |
Unused capacity |
$ |
4. Express total activity availability in terms of activity capacity used and unused capacity. Express the formula in terms of EITHER dollars OR purchase orders.
| Total activity availability |
Activity capacity used |
Unused capacity |
| = |
+ |
5. What if one of the purchasing agents agreed to work half time for $40,000?
a. How many purchase orders could be processed by four and a half purchasing agents?
purchase orders
b. What would unused capacity be in purchase orders?
purchase orders
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