A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7 hours to produce. Labor is $9 per hour.

a) The non-value-added costs are

Mason company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $4,000 per day. Bach, Inc., a competitor, keeps 10 days of inventory on hand, and the competitor's carrying costs average $2,000 per day.

b) The value-added costs are (be sure to label each answer clearly and show all work)