Resource Usage and Supply, Activity Rates, Service OrganizationEcoBrite Labs performs tests on water samples supplied by outside companies to ensure thattheir waste water meets environmental standards. Customers deliver water samples to the laband receive the lab reports via the Internet. The EcoBrite Labs facility is built and staffed tohandle the processing of 100,000 tests per year. The lab facility cost $160,000 to build and isexpected to last 10 years and will have no salvage value. Processing equipment cost $250,000 and has a life expectancy of five years and will have no salvage value. Both facility and equip-ment are depreciated on a straight-line basis. EcoBrite Labs has six salaried laboratory techni-cians, each of whom is paid $30,000. In addition to the salaries, facility, and equipment, EcoBrite Labs expects to spend $50,000 for chemicals and other supplies (assuming 100,000 testsare performed). Last year, 86,000 tests were performed.Required:1. Classify the resources associated with the water testing activity into one of the followingtypes: (1) committed resources and (2) flexible resources.2. Calculate the total annual activity rate for the water testing activity. Break the activity rateinto fixed and variable components. (Round your answers to three significant digits.)3. Compute the total activity availability, and break this into activity output and unusedactivity.4. Calculate the total cost of resources supplied, and break this into the cost of activity usedand the cost of unused activity.
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 $160,000 to build and is
expected to last 10 years and will have no salvage value.
and has a life expectancy of five years and will have no salvage value. Both facility and equip-
ment are
cians, each of whom is paid $30,000. In addition to the salaries, facility, and equipment,
EcoBrite Labs expects to spend $50,000 for chemicals and other supplies (assuming 100,000 tests
are performed). Last year, 86,000 tests were performed.
Required:
1. Classify the resources associated with the water testing activity into one of the following
types: (1) committed resources and (2) flexible resources.
2. 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.)
3. Compute the total activity availability, and break this into activity output and unused
activity.
4. Calculate the total cost of resources supplied, and break this into the cost of activity used
and the cost of unused activity.
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