Question
Non-Value-Added Activities: Non-Value-Added Cost Thayne Company has 28 clerks that work in its Accounts Payable Department. A study revealed the following activities and the relative
Non-Value-Added Activities: Non-Value-Added Cost
Thayne Company has 28 clerks that work in its Accounts Payable Department. A study revealed the following activities and the relative time demanded by each activity:
| Activities | Percentage of Clerical Time |
| Comparing purchase orders and receiving orders and invoices | 11% |
| Resolving discrepancies among the three documents | 74 |
| Preparing checks for suppliers | 10 |
| Making journal entries and mailing checks | 5 |
| The average salary of a clerk is $40,600. |
Required:
Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity.
| Comparing documents | Non-value-added | $fill in the blank 2 |
| Resolving discrepancies | Non-value-added | $fill in the blank 4 |
| Preparing checks | Value-added | $fill in the blank 6 |
| Mailing checks | Value-added | $fill in the blank 8 |
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Modern Advanced Accounting In Canada
Authors: Hilton Murray, Herauf Darrell
7th Edition
1259066487, 978-1259066481
