14.1 - Associates prepares architectural drawings to conform to local structural-safety codes.

Clarke Associates prepares architectural drawings to conform to local structural-safety codes. (Click the icon to view the income statement.) (Click the icon to view the percentage of time spent on activities.) Assume administrative and support costs vary with professional-labor costs. Consider each requirement independently. Read the Requirement 1. How much of the total costs in 2020 are value-added, non-value-added, or in the gray area between? Explain your answers briefly. What actions can Clarke take to reduce its costs? Begin by calculating the total labor costs, then calculate the total costs. (If an input field is not used in the table, leave the input field empty; do not enter a zero. Round your answers to the nearest whole dollar.) Data table Data table Requirements 1. How much of the total costs in 2020 are value-added, non-value-added, or in the gray area between? Explain your answers briefly. What actions can Clarke take to reduce its costs? 2. What are the consequences of misclassifying a non-value-added cost as a value-added cost? When in doubt, would you classify a cost as a value-added or non-value-added cost? Explain briefly. 3. Suppose Clarke could eliminate all errors so that it did not need to spend any time making corrections and, as a result, could proportionately reduce professional-labor costs. Calculate Clarke's operating income for 2020. 4. Now suppose Clarke could take on as much business as it could complete, but it could not add more professional staff. Assume Clarke could eliminate all errors so that it does not need to spend any time correcting errors. Assume Clarke could use the time saved to increase revenues proportionately. Assume travel costs will remain at $20,000. Calculate Clarke's operating income for 2020