Conside * Requirements -X alue-ad its box is no bilar.) Nd a 1. How much of the total costs in 2017 are value-added, non-value-added, or in the gray area between? Explain your answers briefly. What actions can Creighton 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 Creighton 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 Creighton's operating income for 2017 4. Now suppose Creighton could take on as much business as it could complete, but it could not add more professional staff. Assume Creighton could eliminate all errors so that it does not need to spend any time correcting errors. Assume Creighton could use the time saved to increase revenues proportionately. Assume travel costs will remain at $18,000. Calculate Creighton's operating income for 2017 Question Help E13-18 (similar to) Creighton Associates prepares architectural drawings to conform to local structural-safety codes (Cick 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 pelosonal-labor costs. Consider each requrement independently, Read the Requirement 1. How much of the total conte in 2017 are value-added, non-value-added, or in the gray area butwoen? Explain your mowers briefly. What actions can Creightori take to reduce in Begin by contestating the total labor costs, then calculate the total cost of a box in not used in the table, leave the box empty; do not enter a zero, Round your answer to the nearest whole dollar) Gray Non-value cont? Value Added Area Added Total Making calculations and preparing drawings Checking calculations and drawings Correcting actors found in drawings any number in the edit fields and then click Check Answer 8 parts remaining Clear All Check Answer Data Table the total costs in 2017 are fly. What actions can Cre abor costs, then calculate Round your answers to Its income statement for 2017 is as follows: 630,800 Revenues Salaries of professional staff (7,600 hours * $48 per hour) Travel ring drawings wings wings 364,800 18,000 153,216 Administrative and support costs Total costs 536,016 fields and then click Che S 94,784 Operating income Dret DAR Data Table - X costs in 2017 What actions can Creightonta then calcula foundl,our answers to the nea 3 ngs The percentage of time spent by professional staff on various activities follows: Making calculations and preparing drawings for clients 73% Checking calculations and drawings Correcting errors found in drawings (not billed to clients) Making changes in response to client requests (billed to clients) 7 Correcting own errors regarding building codes (not billed to clients) Total 100 % 8 9 then click a 100 % Chec Print Done Creighton 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 requiroment independently Read the requirements Gray Non-value -Added Area Total Value Added Making calculations and preparing drawings Checking calculations and drawings Correcting errors found in drawings Making changes in response to client requests Correcting errors to moet government building code Total professional labor costs Enter any number in the edit fields and then click Check Answer 8 parts CAH
