Question
Part a: Analyze the percentage of value-added and non-value-added activities. Show your work. Part b: After thoroughly reviewing all the activities, you realize you cannot
Part a: Analyze the percentage of value-added and non-value-added activities. Show your work. Part b: After thoroughly reviewing all the activities, you realize you cannot eliminate any of the non-value-added activities. List three plans for reducing the monetary impact of the non-value-added activities.
| Quality Control Activities | Activity Cost | Classification |
| Design engineering | $ 75,000.00 | Value-added |
| Disposing of rejected materials | $ 170,000.00 | Non-value-added |
| Finished goods inspection | $ 125,000.00 | Value-added |
| Materials inspection | $ 70,000.00 | Value-added |
| Preventive maintenance | $ 125,000.00 | Value-added |
| Processing returned materials | $ 135,000.00 | Non-value-added |
| Disposing of scrap | $ 215,000.00 | Non-value-added |
| Assessing vendor quality | $ 35,000.00 | Value-added |
| Rework | $ 410,000.00 | Non-value-added |
| Warranty work | $ 275,000.00 | Non-value-added |
| Total activity cost | $ 1,635,000.00 |
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Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
9th Edition
978-0470317549, 9780470387085, 047031754X, 470387084, 978-0470533475
