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In an effort to expand the usefulness of its activity-based costing system, Peter Catalanos Verde Vineyards decides to adopt activity-based management techniques (ABM). One of
In an effort to expand the usefulness of its activity-based costing system, Peter Catalanos Verde Vineyards decides to adopt activity-based management techniques (ABM). One of these ABM techniques is classifying its activities as either value-added or nonvalue-added.
1. | Culling and replanting: Dead or overcrowded vines are culled, and new vines are planted or relocated. (Each variety has a separate vineyard.) | ||
2. | Tying: The posts and wires are reset, and vines are tied to the wires for the dormant season. | ||
3. | Trimming: At the end of the harvest, the vines are cut and trimmed back in preparation for the next season. | ||
4. | Spraying: The vines are sprayed with chemicals for protection against insects and fungi. | ||
5. | Harvesting: The grapes are hand-picked, placed in carts, and transported to the crushers. | ||
6. | Stemming and crushing: Cartfuls of bunches of grapes of each variety are separately loaded into machines, which remove stems and gently crush the grapes. | ||
7. | Pressing and filtering: The crushed grapes are transferred to presses that mechanically remove the juices and filter out bulk and impurities. | ||
8. | Fermentation: The grape juice, by variety, is fermented in either stainless-steel tanks or oak barrels. | ||
9. | Aging: The wines are aged in either stainless-steel tanks or oak barrels for one to three years, depending on the variety. | ||
10. | Bottling and corking: Bottles are machine-filled and corked. | ||
11. | Labelling and boxing: Each bottle is labelled, as is each nine-bottle case, with the name of the vintner, vintage, and variety. | ||
12. | Storing: Packaged and boxed bottles are stored awaiting shipment. | ||
13. | Shipping: The wine is shipped to distributors and private retailers. | ||
14. | Heating and air-conditioning of plant and offices. | ||
15. | Maintenance of buildings and equipment: Printing, repairs, replacements, and general maintenance are performed in the off-season. |
For each of Verdes 15 activity cost pools, classify each of the activities as either value-added or nonvalue-added.
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