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please answer it correctly both parts. Maquina Company produces custom-made machine parts. Maquina recently has implemented an activity-based management (ABM) system with the objective of
please answer it correctly both parts.
Maquina Company produces custom-made machine parts. Maquina recently has implemented an activity-based management (ABM) system with the objective of reducing costs. Maquina has begun analyzing each activity to determine ways to increase its efficiency. Setting up equipment was among the first group of activities to be carefully studied. The study revealed that setup hours was a good driver for the activity. During the last year, the company incurred fixed setup costs of $826,540 (salaries of 17 employees). The fixed costs provide a capacity of 37,570 hours (2,210 per employee at practical capacity). The setup activity was viewed as necessary, and the value-added standard was set at 2.210 hours. Actual setup hours used in the most recent period were 35,490. Required: 1. Calculate the volume and unused capacity variances for the setup activity. Enter all amounts as positive values Volume Variance Unfavorable Unused Capacity Variance Favorable Feedback Check My Work 1. Activity volume variance = (AQ - SQ) x SP. Unused Capacity variance = (AU - AQ) x SP. 2. Prepare a report that presents value-added, non-value-added, and actual costs for setup. Maquina Company Value- and Non-Value-Added Cost Report Value Added Non-Value-Added Actual Setting up $Step by Step Solution
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