Selected information about several activities for Systems Integrators, Inc. follows:
Resources Supplied Cost Driver Rate Cost Driver Volume
Material $50,000 $ 5 10,000
Energy 8,000 15 420
Setups 3,500 50 60
Purchasing 3,000 40 65
Customer Service 3,200 50 60
Long-term labor 12,000 50 210
Administration 24,000 50 400
a. Compute the unused capacity for each activity.
b. Write a short report stating why managers should know the difference between resources used and resources supplies. Give examples of how managers could use the preceding information on resources used and resources supplied.
a. The used capacity is the difference between resource supplied and resource used
Resource used = Cost driver rate X cost driver volume
Resource Supplied Used Unused capacity
Material $50,000 $50,000 ...
The solution determines the cost accounting for Systems Integrators Inc. activities.