managerial accounting hansen
the demand for purchasing from 27,600 orders to 21,600 orders. What actions tO HpIove the purchasing activity and reduce should now be taken regarding activity capadty management? Willson Company has developed value-added standards for four activities: purchas-5-1 ing parts, assembling parts, administering parts, and inspecting parts. The activities the activity driver, the standard and actual quantities, and the price standards follow for 2005: and Non-Value- Added Costs LO3 Activities Purchasing parts Assembling parts Administering partsNumberkof parts 18,000 25,800 110 Inspecting parts Activity Driver Orders Labor hours 1,500 180,000 2,100 $300 12 199,500 Inspection hours 0 75,00o 15 The actual prices paid per unit of each activity driver were equal to the standard prices Required 1. Prepare a cost report that lists the value-added costs, non-value-added costs, and actual costs for each activity 2. Which activities are non-value-added? Explain why. Explain why value-added activities can have non-value-added costs. Refer to Exercise 5-12. Suppose that Willson Company used an activity analysis pro- 5-13 gram during 2006 in an effort to reduce non-value-added costs. The value-added standards, actual quantities, and prices for 2006 follow: SQ 1,500 AQSP 1,800$300 Activities Purchasing parts Assembling parts Administering parts Activity. Driver Orders Labor hours Number of parts18,00024,000110 12 186,000 180,000 15,000 Inspection hours the demand for purchasing from 27,600 orders to 21,600 orders. What actions tO HpIove the purchasing activity and reduce should now be taken regarding activity capadty management? Willson Company has developed value-added standards for four activities: purchas-5-1 ing parts, assembling parts, administering parts, and inspecting parts. The activities the activity driver, the standard and actual quantities, and the price standards follow for 2005: and Non-Value- Added Costs LO3 Activities Purchasing parts Assembling parts Administering partsNumberkof parts 18,000 25,800 110 Inspecting parts Activity Driver Orders Labor hours 1,500 180,000 2,100 $300 12 199,500 Inspection hours 0 75,00o 15 The actual prices paid per unit of each activity driver were equal to the standard prices Required 1. Prepare a cost report that lists the value-added costs, non-value-added costs, and actual costs for each activity 2. Which activities are non-value-added? Explain why. Explain why value-added activities can have non-value-added costs. Refer to Exercise 5-12. Suppose that Willson Company used an activity analysis pro- 5-13 gram during 2006 in an effort to reduce non-value-added costs. The value-added standards, actual quantities, and prices for 2006 follow: SQ 1,500 AQSP 1,800$300 Activities Purchasing parts Assembling parts Administering parts Activity. Driver Orders Labor hours Number of parts18,00024,000110 12 186,000 180,000 15,000 Inspection hours
