g Company has Capaety Used, Unused Capacity Coras Each agent is paid $28,000 per year and is able to process 4,000 purchase orders. Last agent 800 purchase orders were processed by the five agents a purchasing department staffed by five purchasing CORNERSTO alculate the activity rate per purchase order Calculate, in terms of purchase orders, the: a. total activity availability b. unused capacity 3. Calculate the dollar cost of d. total activity availability b. unused capacity Esoress total activity availability in terms of activity capacity used and unused capacity What if one of the purchasing agents agreed to work half time for $14,000? How many pur- 5.chase orders could be processed by four and a half purchasing agents? What would unused capacity be in purchase orders? ne Exercise 3.3 Account Analysis to Determine Cost Behavior ersto Poston, owner of Poston Manufacturing, Inc., wants to determine the cost behavior of overhead. Darnell pays his workers a salary; during busy times, everyone works to get rs out. Temps (temporary workers hired through an agency) may be hired to pack and ell prepare completed orders fo and administrative tasks r shipment. During slower times, Darnell catches up on bookkeep- while the salaried workers do preventive maintenance, clean the etc. Temps are not hired during slow times. Darnell found that workers' sal- aries, temp agency payments, rentals, utilities, and plant and equipment depreciation are the that workers' salaries and plant and equipment depreciation are fixed, temp agency payments are associated with the number of orders (since temp workers are used to pack and prepare completed orders for shipment), and electricity is associated with he number of machine hours. When the number of different parts stored by Poston exceeds the snace in the materials storeroom, Darnell rents nearby warchouse space. He can rent as much or as little space as he wants on a month-to-month basis. Therefore, he believes warehouse rental largest dollar accounts. He believes payments are variable with the number of parts purchased and stored. The account balances for the past six months as well as the six-month total are as follows Temp Agency Rental Electricity Depreciation S 275 Salaries January $43,200 Information on number of machine hours, orders, and parts for the six-month period follows Number of Parts Number of Orders Machine Hours (continued)