Solution :
1. calculate the activity rate per grooming order
Activity rate Amount paid to agent
Number of grooming order
28,000
4,000
Therefore, the activity rate = 7 per grooming order
2. Calculating, in terms of grooming order, the :
a. Total activity availability
Number of grooming orders (A) = 4,000
Number of agents (B) 5
Total activity availability (A x B) 20,000
b). Total activity availability 20,000
Less: Orders actually processed (17,800)
Unused capacity 2,200
3. calculating the dollar cost of :
a). Amount paid to the agent (A 28,000
Number of agents (B) 5
Total activity availability in dollars (AxB) 140,000
b). Unused capacity (A) 2,200
Activity rate (B) 7
Unused capacity in dollars (AxB) 15,400