Calculate the activity rate for the purchase order activity
Course:- Managerial Accounting
Reference No.:- EM13949685

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Resource Usage and Cost Behavior

Kaylin Manufacturing Company has three salaried accounts payable clerks responsible for processing purchase invoices. Each clerk is paid a salary of $30,000 and is capable of processing 5,000 invoices per year (working effi- ciently). In addition to the salaries, Kaylin spends $9,000 per year for forms, postage, checks, and so on (assuming 15,000 invoices are processed). During the year, 12,500 invoices were processed.


1. Calculate the activity rate for the purchase order activity. Break the activity into fixed and variable components.

2. Compute the total activity availability, and break this into activity usage and unused activity.

3. Calculate the total cost of resources supplied, and break this into activity usage and unused activity.

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