E13-18 (similar to) 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 requirements. Question Help Requirement 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 Clarke take to reduce its costs? Begin by calculating the total labor costs, then calculate the total costs. (If a box is not used in the table, leave the box empty; do not enter a zero. Round your answers to the nearest whole dollar.) Value- Gray Non-value Added Area -Added Total Making calculations and preparing drawings Checking calculations and drawings Correcting errors found in drawings Making changes in response to client requests Correcting errors to meet government building code Total professional labor costs Data Table Its income statement for 2017 is as follows: Revenues Salaries of professional staff (8,200 hours * $48 per hour) Travel Administrative and support costs Total costs Operating income $ 740,460 393,600 17,000 181,056 591,656 $ 148,804 The percentage of time spent by professional staff on various activities follows: Making calculations and preparing drawings for clients Checking calculations and drawings Correcting errors found in drawings (not billed to clients) Making changes in response to client requests (billed to clients) Correcting own errors regarding building codes (not billed to clients) Total 74 % 5 6 7 8 100 %