Corazon Manufacturing Company has a purchasing department staffed by five purcha
ID: 2338187 • Letter: C
Question
Corazon Manufacturing Company has a purchasing department staffed by five purchasing agents. Each ag any 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 CS C ) per purchase order 2. Calculate, in terms of purchase orders, the: a. Total activity availability purchase orders b. Unused capacity purchase orders . Set . Mai unde . Sel . Prin .Prin cash . Blac 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 total activity availability in terms of activity capacity used and unused capacity Purchase orders Totai activity availability Activity capacity used Unused capacity Dollars cost Total activity availability Activity capacity used Unused capacity S. What if one of the purchasing agents agreed to work half time for $14,000? a. How many purchase orders could be processed by four and a half purchasing agents? purchase orders Previous Next Save and ExitSubenit Test for GradingExplanation / Answer
Purchase order = 4000 Amount paid by agent = $ 28,000 Number of purchasing agents = 5 Last year purchase orders = 17,800 1 Computation of activity rate per purchasing order: Activity rate per purchasing order = Amount paid by agent/Purchase order = $28,000/4,000 = $ 7 2 Computation of Total activity availability in terms of purchase order: a. Total activity availability = Purchase order X Number of purchasing agents 4,000 X 5 20000 Computation of unused capacity in terms of purchase order: b. Unused capacity = Total capacity availability - Last year purchase orders = 20,000 - 17,800 = 2,200 3 Computation of Total activity availability in terms of dollar cost: a. Total activity availability ($) = Total activity availability X Activity rate per purchasing order = 20,000 X $7 = $ 1,40,000 Computation of unused capacity in terms of dollar cost: b. Unused capacity ($) = Unused capacity X Activity rate per purchasing order = 2,200 X $7 = $ 15,400 4 Purchase order Total activity availability = Activity capacity used + Unused capacity 20,000 = 17,800 + 2,200 Dollar cost Total activity availability = Activity capacity used + Unused capacity $ 1,40,000 = $ 1,24,600 + $ 15,400 5 One purchasing agent agreed to work half time for $14,000 a. Computation of purchase orders to be processed by four and half purchasing agents: Purchase orders to be processed by four and half purchasing agents = Purchase order X 4.5 = 4,000X 4.5 = 18000 b. 18000 = 17,800 + unused capacity unused capacity = 18000 - 17800 unused capacity = 200