Resource Supply and Usage, Special Order, Relevancy

Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of $24,700 and is capable of processing as many as 6,250 purchase orders per year. Each clerk uses a PC and laser printer in processing orders. Time available on each PC system is sufficient to process 6,250 orders per year. The cost of each PC system is $1,250 per year. In addition to the salaries, Elliott spends $27,000 for forms, postage, and other supplies (assuming 25,000 purchase orders are processed). During the year, 24,250 orders were processed.

Required:

1. Which of the resources associated with purchasing can be classified as flexible resources?

Forms, Postage and Supplies

Which of the resources associated with purchasing can be classified as committed resources?

PC system and clerks

2. Compute the total activity availability, and break this into activity usage and unused activity.

Activity availability:	_______	purchase orders
Activity usage:	_______	purchase orders
Unused activity:	_______	purchase orders

3. Calculate the total cost of resources supplied (activity cost), and break this into the cost of activity used and the cost of unused activity. When required, round your answers to the nearest dollar. If required, round your intermediate calculations to five decimal places.

Activity cost:	______
Cost of activity used:	______
Cost of unused activity:	______