IDENTIFY VALUE ADDED AND NON-VALUE ADDED ACTIVITIES

Cost drivers; non-value-added costs: manufacturer Brake Bits Ltd (BBL) manufactures a variety of small parts for the automotive industry. The company's manufacturing overhead cost budget for the current year is as follows: Electric power $22500 Purchasing $40000 Supervision 88000 Waste collection 2000 Machine maintenance: Custodial labour 20000 labour 45500 Telephone service 3500 Machine maintenance: Engineering design 34 000 materials 11500 Inspection of raw materials 10000 Natural gas (for heating) 17500 Receiving 10000 Factory supplies 20 000 Inspection of finished Setup labour 15 000 goods 15000 Lubricants 5000 Packaging 31 000 Property taxes 12 500 Shipping 15000 Insurance 17500 Wages of parts clerks (find Depreciation on parts for production manufacturing equipment 52 500 departments) 30000 Depreciation on trucks and Wages of material handlers 35000 forklifts 35000 Fuel for trucks and forklifts 35000 Depreciation on material Depreciation on raw- conveyors 7500 material warehouse 25000 Building depreciation 80000 Depreciation on finished- Grinding wheels 2500 goods warehouse 29000 Drill bits 1000 These budgeted overhead costs total $768 000, and the budgeted amount of direct labour for the year is 40 000 hours