Corazon Manufacturing Company has a purchasing department staffed by five purchasingagents. Each agent is paid $28,000 per year and is able to process 4,000 purchase orders. Lastyear, 17,800 purchase orders were processed by the five agents.Required:1. Calculate the activity rate per purchase order.2. Calculate, in terms of purchase orders, the:a. total activity availabilityb. unused capacity3. Calculate the dollar cost of:a. total activity availabilityb. unused capacity4. Express total activity availability in terms of activity capacity used and unused capacity. 5. What if one of the purchasing agents agreed to work half time for $14,000? How many pur-chase orders could be processed by four and a half purchasing agents? What would unused capacity be in purchase orders?
Corazon Manufacturing Company has a purchasing department staffed by five purchasing
agents. Each agent is paid $28,000 per year and is able to process 4,000 purchase orders. Last
year, 17,800 purchase orders were processed by the five agents.
Required:
1. Calculate the activity rate per purchase order.
2. Calculate, in terms of purchase orders, the:
a. total activity availability
b. unused capacity
3. Calculate the dollar cost of:
a. total activity availability
b. unused capacity
4. Express total activity availability in terms of activity capacity used and unused capacity.
5. What if one of the purchasing agents agreed to work half time for $14,000? How many pur-
chase orders could be processed by four and a half purchasing agents? What would unused
capacity be in purchase orders?
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