Boothe Inc. has the following two activities: (1) Retesting reworked products, cost: $ 480,000. The retesting cost of the most efficient competitor is $ 150,000. (2) Welding subassemblies, cost: $ 900,000 (45,000 welding hours). A benchmarking study reveals that the most efficient level for Boothe would use 36,000 welding hours and entail a cost of $ 720,000.
Required:
Determine the nonvalue-added cost of each activity.