Exercise 4-16

Lasso and Markowitz is a law firm that is initiating an activity-based costing system. Sam Lasso, the senior partner and strong supporter of ABC, has prepared the following list of activities performed by a typical attorney in a day at the firm. Classify each of the activities listed by Sam Lasso as value-added or nonvalue-added.

Activities		Hours
Writing contracts and letters		1.5
Attending staff meetings		0.5
Taking depositions		1.0
Doing research		1.0
Traveling to/from court		1.0
Contemplating legal strategy		1.0
Eating lunch		1.0
Litigating a case in court		2.5
Entertaining a prospective client		1.5

How much was value-added time? (Round answer to 1 decimal place, e.g. 2.1.)

Value-added time

hours

How much was nonvalueadded time? (Round answer to 1 decimal place, e.g. 2.1.)

Nonvalueadded

hours