Gorman 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 2010 are as follows:LO1

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Activities Activity Driver SQ AQ SP Purchasing parts Purchase orders 1,300 1,820 $200 Receiving parts Receiving orders 2,600 3,900 130 Moving parts Number of moves 0 1,300 260 Setting up equipment Setup hours 0 5,200 78 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.