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Activity Capacity Management Uchdorf Manufacturing just completed a study of its purchasing activity with the...

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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: five purchasing agents capable of processing 2,400 orders per year (12,000 orders) Purchasing agent cost (salary): $45,600 per year Actual usage: 10,600 orders per year Value-added quantity: 7,000 orders per year Required: 1. Calculate the volume variance. $ 95,000 Unfavorable 2. Calculate the unused capacity variance. $ 26,600 Favorable 3. What if the actual usage drops to 9,000 orders? What effect will this have on capacity management? 30,400 X Favorable

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