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Q.5 Perot Manufacturing Company has three salaried clerks to process purchase orders. Each clerk is paid a salary of $38.000 and is capable of processing
Q.5 Perot Manufacturing Company has three salaried clerks to process purchase orders. Each clerk is paid a salary of $38.000 and is capable of processing 5,000 purchase orders per year (working efficiently). In addition to the salaries, Perot spends $7,500 per year for forms, postage, and so forth. Perot assumes 15.000 purchase orders will be processed. During the year, 12,500 orders were processed. Required: i. Calculate the activity rate for the purchase order activity. Break the activity into fixed and variable components. 11. Compute the total activity availability, and break this into activity output and unused activity. Calculate the total cost of the resource supplied, and break this into the cost of activity output and the cost of unused activity. 111
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