Answer:
Purchasing resources which can be classed as flexible : FORMS, POSTAGE, SUPPLIES
Purchasing resources which can be classed as committed : PC systems, Clerks
2.)
Total Activity availability = 26,000 purchased orders
Activity usage = 25,350 purchased orders
Unsed activity usage = (26000 - 25350) = 650 purchased orders
Activity cost = (25750 ×4) +(1100 ×4) +((27560/26000)×25350) = $134,271
Cost of activity used = Activity cost x Activity usage/Activity availability
134,271 x (25,350/26,000) = $130,914
Cost of unused activity = Activity cost x unused activity/Activity availability
134,271 x 650/26,000 = $3,357
4.) if purchase order increases by 500, total activity cost will remain unchanged and no additional purchase will need to be made
Activity usage = 25,850
Unusued activity = 150
Activity cost = 134,271
Cost of used activity = 134,271 ×(25850/26000) = 133,496.36
Cost of unused activity = 134271×(150/26000) = 774.64
4b) If purchase order increases by 700, total activity cost will increase as purchase order to be processed will become 26,050, therefore additional 50 purchase order on forms, postage and other supplies will need to be made
Extra cost = 50 ×(27560/26000) = $53
Explanation:
2.)
Total Activity availability = 26,000 purchased orders
Activity usage = 25,350 purchased orders
Unsed activity usage = 650 purchased orders
3.)
Activity cost = (25750 ×4) +(1100 ×4) +((27560/26000)×25350) = $134,271
Cost of activity used = Activity cost x Activity usage/Activity availability
134,271 x (25,350/26,000) = $130,914
Cost of unused activity = Activity cost x unused activity/Activity availability
134,271 x 650/26,000 = $3,357
4.) if purchase order increases by 500
Total Activity cost will remain unchanged
Activity usage = 25,850
Unusued activity = 150
Activity cost = 134,271
Cost of used activity = 134,271 ×(25850/26000) = 133,496.36
Cost of unused activity = 134271×(150/26000) = 774.64
4b) If purchase order increases by 700, total activity cost will increase as purchase order to be processed will become 26,050, therefore additional 50 purchase order on forms, postage and other supplies will need to be made
Extra cost = 50 ×(27560/26000) = $53
