McCawl Company 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 2009 are as follows:

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.
2. Which activities are non-value-added? Explain why. Also, explain why value-added activities can have non-value-addedcosts.

Transcribed Image Text:

Activities Activity Driver AQ 1,400 1,000 SP Purchasing parts Recciving parts Moving parts Setting up equipment Purchase orders Receiving orders Number of moves Setup hours 1,000 S150 2,000 3,000 0 0 200 60 4,000