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: eight purchasing agents capable of processing 2,300 orders per year (18,400 orders) Purchasing agent cost (salary): $43,300 per year Actual usage: 17,100 orders per year Value-added quantity: 10,200 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 14,000 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: eight purchasing agents capable of processing 2,300 orders per year (18,400 orders) Purchasing agent cost (salary): $43,300 per year Actual usage: 17,100 orders per year Value-added quantity: 10,200 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 14,000 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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