Honley Company has 20 clerks that work in its accounts payable department. A study revealed the following activities and the relative time demanded by each activity:

The average salary of a clerk is $30,000.
Required:
Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity. For non-value-added activities, indicate why they are non-value-added.

Transcribed Image Text:

Percentage of Activities Comparing purchase orders and receiving orders and invoices Resolving discrepancies among the three documents Preparing checks for suppliers Making journal entries and mailing checks Clerical Time 15% 70 10 5