Refer to Exercise 12-9. Suppose that for 2007, Zurcher Company has chosen suppliers that provide higher-quality parts and redesigned its plant layout to reduce material movement. Additionally, Zurcher implemented a new setup procedure and provided training for its purchasing agents. As a consequence, less setup time is required and fewer purchasing mistakes are made. At the end of 2007, the following information is provided:

Required:
1. Prepare a report that compares the non-value-added costs for 2007 with those of 2006.
2. What is the role of activity reduction for non-value-added activities? For valueadded activities?
3. Comment on the value of a trend report.

Transcribed Image Text:

Activities Activity Driver SQ AQ SP Purchasing parts Purchase orders 1,000 1,200 $150 Receiving parts Moving parts Receiving orders 2,000 2,400 100 Number of moves 0 400 200 Setting up equipment Setup hours 0 1,000 60