Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 3, Problem 2CE
Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each agent is paid $28,000 per year and is able to process 4,000 purchase orders. Last year, 17,800 purchase orders were processed by the five agents.
Required:
- 1. Calculate the activity rate per purchase order.
- 2. Calculate, in terms of purchase orders, the:
- a. total activity availability
- b. unused capacity
- 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.
- 5. What if one of the purchasing agents agreed to work half time for $14,000? How many purchase orders could be processed by four and a half purchasing agents? What would unused capacity be in purchase orders?
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Chapter 3 Solutions
Cornerstones of Cost Management (Cornerstones Series)
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