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Resource Usage and Supply, Activity Rates, Service Organization EcoBrite Labs performs tests on water samples supplied by outside companies to ensure that their waste water

Resource Usage and Supply, Activity Rates, Service Organization
EcoBrite Labs performs tests on water samples supplied by outside companies to ensure that their waste
water meets environmental standards. Customers deliver water samples to the lab and receive the lab
reports via the Internet. The EcoBrite Labs facility is built and staffed to handle the processing of 100,000
tests per year. The lab facility cost $140,000 to build and is expected to last 10 years and will have no
salvage value. Processing equipment cost $240,000 and has a life expectancy of five years and will have
no salvage value. Both facility and equipment are depreciated on a straight-line basis. EcoBrite Labs has
seven salaried laboratory technicians, each of whom is paid $35,000. In addition to the salaries, facility,
and equipment, EcoBrite Labs expects to spend $47,000 for chemicals and other supplies (assuming
100,000 tests are performed). Last year, 87,000 tests were performed.
Required:
Classify the resources associated with the water testing activity into one of the following types: (1)
committed resources and (2) flexible resources.
Committed resources:
Flexible resources:
Calculate the total annual activity rate for the water testing activity. Break the activity rate into fixed
and variable components. (Round your answers to three significant digits.)
Total water testing rate:
per test
Variable activity rate:
per test
Fixed activity rate:
per test
Compute the total activity availability, and break this into activity output and unused activity.
Activity availability:
Activity usage:
tests
Unused activity:
tests
tests
Calculate the total cost of resources supplied, and break this into the cost of activity used and the cost
of unused activity.
Cost of activity supplied:
Cost of activity used:
Cost of unused activity:
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