Question

Exercise 4-16

Lasso and Markowitz is a law firm that is initiating an activity-based costing system. Sam Lasso, the senior partner and strong supporter of ABC, has prepared the following list of activities performed by a typical attorney in a day at the firm.

Classify each of the activities listed by Sam Lasso as value-added or non–value-added.

Activities		Hours
Writing contracts and letters		1.42		Non-value-addedValue-added
Attending staff meetings		0.49		Non-value-addedValue-added
Taking depositions		0.95		Non-value-addedValue-added
Doing research		1.03		Non-value-addedValue-added
Traveling to/from court		1.01		Non-value-addedValue-added
Contemplating legal strategy		1.10		Non-value-addedValue-added
Eating lunch		1.02		Non-value-addedValue-added
Litigating a case in court		2.57		Non-value-addedValue-added
Entertaining a prospective client		1.60		Non-value-addedValue-added

How much was value-added time? (Round answer to 2 decimal places, e.g. 2.13.)

Value-added time

hours

How much was non–value–added time? (Round answer to 2 decimal places, e.g. 2.13.)

Non–value–added

hours

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Answer 1