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 2015 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-added costs.

Transcribed Image Text:

sQ 2,600 5,200 SP S300 195 390 Activities Activity Driver Purchase orders Receiving orders Number of moves Setup hours A0 Purchasing parts Receiving parts Moving parts Setting up equipment 3,640 7,800 2,600 10,400