Question
Evans Inc. has the following two activities: (1) Reworking products, cost: $740,000. The reworking cost of the most efficient similar-sized competitor is $200,000. (2) Purchasing
Evans Inc. has the following two activities: (1) Reworking products, cost: $740,000. The reworking cost of the most efficient similar-sized competitor is $200,000. (2) Purchasing parts, cost: $900,000 (45,000 purchasing hours). A benchmarking study reveals that the most efficient level for Evans would use 24,000 purchasing hours and entail a cost of $450,000. Required: Determine the nonvalue-added cost of each activity.
Cinturas Company produces two types of mens shirts: casual and formal. There are four activities associated with the two products. Drivers for the four activities are as follows: Casual Formal Cutting hours 12,000 18,000 Sewing hours 3,000 7,000 Inspection hours 2,000 4,000 Rework hours 400 600 Required: 1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places.
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