4 15 Exhibit 1 6 7 Resource Practical Capacity 8 Design/Drafting Existing Capacity Available and Used and Capacity Costs Current capacity and usage (annual) Purchased Cost Cost Driver of Capacity 22,000 design hours $550,000.00 Used Capacity 19,500 9 Engineering 15,000 engineering hr $750,000.00 14,750 10 Fabrication 40,000 11 Powder coating 380,000 parts $ 30,000.00 square feet $1,710,000.00. 39,000 210,000 12 Scheduling 13 General factory 750 80,000 job setups $ 756,000.00 machine hrs $2,400,000.00 640 64,000 14 15 16 Exhibit 2 Resource needs for potential new products Pool shade Trellis 17 Cost Driver requirements requirements 10 Resource 19 Design/Drafting 201 Engineering design hours engineering hrs 30 20 4 2 21 Fabrication parts 40 22 22 23 24 Powder coating Scheduling General factory job setups square feet 1600 170 1 1 machine hrs 80 10 25 26 27 Pool shade 28 Selling price per unit 43,000.00 29 Material cost per unit. 19,250.00 30 31 32 Desired profit on sales 0.30 Pool shades 120 Trellises 60 Trellis 4,400.00 800.00 Demand Demand 24 Practical Capacity Cost driver unit Activity Label Rate eg.) design hrs eg.)/des. hr 15 46 47 2a) Compute the current activity rates based on practical capacity ABC-Practical Capacity 48 Activity Cost 49 Design/Drafting 50 Engineering 51 Fabrication 521 Powder coating 53 Scheduling 54 General factory costs 55 561 57 58 2b) Compute the cost of unused capacity using practical capacity rates. 59 Cost of Unused Capacity Practical Used Unused 60 Activity Capacity Capacity Capacity Rate Label Total Cost 61 Design/Drafting 62 Engineering 63 Fabrication 64 Powder coating 65 Scheduling 66 General factory 67 Total cost of unused capacity 68 69 70