Activity Capacity Management Uchdorf Manufacturing just completed a study of its purchasing activity with the objective of improving its efficiency. The driver for the activity is number of purchase orders. The following data pertain to the activity for the most recent year: Activity supply: five purchasing agents capable of processing 3,300 orders per year (16,500 orders) Purchasing agent cost (salary): $43,500 per year Actual usage: 14,200 orders per year Value-added quantity: 9,250 orders per year Required: 1. Calculate the volume variance. Round your intermediate calculation to two decimal places and the final answer to the nearest dollar. 2. Calculate the unused capacity variance. Round your intermediate calculation to two decimal places and the final answer to the nearest dollar. ▾ 3. What if the actual usage drops to 12,000 orders? What effect will this have on capacity management? Round your intermediate calculation to two decimal places and the final answer to the nearest dollar.

Activity Capacity Management Uchdorf Manufacturing just completed a study of its purchasing activity with the objective of improving its efficiency. The driver for the activity is number of purchase orders. The following data pertain to the activity for the most recent year: Activity supply: five purchasing agents capable of processing 3,300 orders per year (16,500 orders) Purchasing agent cost (salary): $43,500 per year Actual usage: 14,200 orders per year Value-added quantity: 9,250 orders per year Required: 1. Calculate the volume variance. Round your intermediate calculation to two decimal places and the final answer to the nearest dollar. 2. Calculate the unused capacity variance. Round your intermediate calculation to two decimal places and the final answer to the nearest dollar. ▾ 3. What if the actual usage drops to 12,000 orders? What effect will this have on capacity management? Round your intermediate calculation to two decimal places and the final answer to the nearest dollar.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 5CE: Uchdorf Manufacturing just completed a study of its purchasing activity with the objective of...

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