Zurcher 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 2006 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 valueadded activities can have non-value-added costs.

Transcribed Image Text:

Activities Activity Driver SQ AQ SP Purchasing parts Purchase orders 1,000 1,400 $150 Receiving parts Receiving orders 2,000 3,000 100 Moving parts Number of moves 0 1,000 200 Setting up equipment Setup hours 0 4,000 60