rotone Exorche M ercise 3.2 Activity Avality. Capacity Ud acturing Company has de o t is paid 575.000 per year chase orders were proceed by the five G 17.00 purchase order O CORNERSTONE inquired: Calon te the activity rate per purchase ate, in terms of purchase order 1. total activity availability used capacity Calculate the dollar costo rotal activity availability unused capacity Express total What if one or Total activity availability in terms of activity capacity wedd y one of the purchasing agents agreed to work half time for $14, Howany could be processed by four and a half purchasing what Chase orders could be city be in purchase onders Cornerstone Exer Darnell Posten har and overhead. Darnell the orders our prepare compte ing and admin lines and buildings aries, temp agency Largest dollar ago are fixed, temp agen are used to pack an the number of machine space in the ma as little space as he wan payments are variable wi ne Exercise 3.3 Account Analysis to Determine Cost Behavior eston, owner of Poston Manufacturing, Inc., wants to determine the cost behavior of rhead. Darnell pays his workers OBJECTIVE bor Temps (temporary workers hired through an agens may be hired to pack and salary, during busy time everyone works to CORNERSTI pleted orders for shipment. During slower time. Darnell catches up on bookkeep ministrative tasks while the salaried workers do building, etc. Temps are not hired during showtime Darell found that workers' eventive maintenance, dean the mp agency payments, rentals, utilities, and plant and equipment depreciation are the ar accounts. He believes that workers salaries and plant and equipment depreciation temp agency payments are associated with the number of orders (since temp workers to pack and prepare completed orders for shipment and electricity is associated with bar of machine hours. When the number of different parts stored by Poston exceeds the the materials storeroom, Darell rents nearby warehouse space. He can rent as much or sce as he wants on a month-to-month basis. Therefore, he believes warehouse rental ats are variable with the number of parts purchased and stored. The account balances for ast six months as well as the six-month total are as follows: Plant & Workers' Temp Agency Warehouse Equipment Salaries Payments Rental Electricity Depreciation $ 7,200 S 0 $ January 150 $ 275 $ 2,200 7,200 540 350 February 385 2.200 7,200 March 1.100 325 655 220 7,200 340 1.350 April 695 2200 7,200 1.750 335 2.200 2.200 1,500 7,200 June Total $43,200 56,240 $13,200 Information on number of machine hours, orders, and parts for the six-month period follows: Machine Hours Number of Orders Number of Parts 200 January 2,000 600 February 3,100 350 March 5,800 400 580 6,200 510 6,500 May June 29.600 Total (continued) 225 May 10 550 April 6,000
