Question

Sanford, Inc., has developed value-added standards for four activities: purchasing parts, receiving parts, moving parts, and...

Sanford, Inc., has developed value-added standards for four activities: purchasing parts, receiving parts, moving parts, and setting up equipment. The activities, the activity drivers, the standard and actual quantities, and the price standards for 20x1 are as follows:

Activities Activity Driver     SQ     AQ     SP
Purchasing parts Purchase orders 1,900 3,250 $110
Receiving parts Receiving orders 3,800 6,500 340
Moving parts Number of moves 0 2,300 390
Setting up equipment Setup hours 0 6,200 265

The actual prices paid per unit of each activity driver were equal to the standard prices.

Required:

1. Prepare a cost report that lists the value-added, non-value-added, and actual costs for each activity. If an amount is zero, enter "0".

Sanford, Inc.
Value- and Non-Value-Added Cost Report
For the Year Ended December 31, 20x1
Value-Added Non-Value-Added Actual
Purchasing parts $ $
Receiving parts
Moving parts
Setting up equipment
Total $ $ $

2. Which activities are non-value-added?

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