Activity Availability, Capacity Used, Unused Capacity
Corazon Manufacturing Company has a purchasing departmentstaffed by five purchasing agents. Each agent is paid $30,000 peryear and is able to process 3,000 purchase orders. Last year,13,350 purchase orders were processed by the five agents.
Required:
1. Calculate the activity rate per purchaseorder.
$ 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 termsof activity capacity used and unused capacity. Express totalactivity availability in terms of activity capacity used and unusedcapacity.
Purchase orders
| Total activity availability | | Activity capacity used | | Unused capacity |
| = | | + | |
Dollars cost
| Total activity availability | | Activity capacity used | | Unused capacity |
| $ | = | $ | + | $ |
5. What if one of thepurchasing agents agreed to work half time for $15,000?
a. How many purchase orders could be processed by four and ahalf purchasing agents?
purchase orders
b. What would unused capacity be in purchase orders?
purchase orders
