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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