Question
ABM-Value/nonvalue added costs Acme Company has developed value-added standards for four activities: purchasing, labor, materials, and maintenance. The activities, the activity drivers, the value-added and
ABM-Value/nonvalue added costs Acme Company has developed value-added standards for four activities: purchasing, labor, materials, and maintenance. The activities, the activity drivers, the value-added and actual quantities, and the price standards are given below for 2019: Value-added and non-value-added activities Activity Driver Std. quantity Actual quantity Std. price Purchasing Orders 100 125 $350.00 Labour Labour Hours 10,000 17,500 $10.00 Materials Kilograms 150,000 198,000 $0.10 Maintenance Machine Hours 25,000 33,000 $1.50The actual prices paid per unit of each activity driver were equal to the standard prices. Required:
1. Prepare a report that lists the value-added costs, non value-added costs, and the actual costs for each activity. [6 marks]
2. Explain each reported non-value-added activity.
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