Activity Capacity Management

Uchdorf Manufacturing just completed a study of its purchasing activity with the objective of improving its efficiency. The driver for the activity is number of purchase orders. The following data pertain to the activity for the most recent year:

Activity supply: seven purchasing agents capable of processing 1,600 orders per year (11,200 orders)

Purchasing agent cost (salary): $47,300 per year Actual usage: 10,600 orders per year Value-added quantity: 6,600 orders per year

Required:

1. Calculate the volume variance. Round your final answer to the nearest dollar. $ - Select your answer -FavorableUnfavorableItem 2

2. Calculate the unused capacity variance. Round your final answer to the nearest dollar. $ - Select your answer -FavorableUnfavorableItem 4

3. What if the actual usage drops to 8,000 orders? What effect will this have on capacity management? Round your final answer to the nearest dollar. $ - Select your answer -FavorableUnfavorable