Please help

Select the appropriate cost classification, then select the action that

Calvert can take to reduce its costs. Doing calculations and responding to client requests for changes [ are non-value-added costs / are value-added costs / are in the gray area ] because customers [ do not perceive these costs as necessary and would be unwilling to pay / perceive these costs as necessary and would be willing to pay ] for the service of preparing architectural drawings.

Costs incurred on correcting errors in drawings and making changes because they were inconsistent with building codes [ are non-value-added costs. / are value-added costs. / are in the gray area. ] Customers [ do not perceive these costs as necessary and would be unwilling to pay / perceive these costs as necessary and would be willing to pay ] for them.

Checking calculations and drawings [ are non-value-added costs / are value-added costs / is in the gray area.] There [ is no room / is room ] for disagreement on these classifications.

Calvert should seek to eliminate these costs by making sure [ all costs are value-added costs. / associates are well-informed and by training associates. / associates only work minimum hours and costs are converted to value-added only. / only a few associates are working at a time.]

Calvert Associates prepares architectural drawings to conform to local structural-safety codes. (Click the icon to view the income statement.) (Click the icon to view the percentage of time spent on activities.) Assume administrative and support costs vary with professional-labor costs. Consider each requirement independently. Read the Requirement 1. How much of the total costs in 2017 are value-added, non-value-added, or in the gray area between? Explain your answers briefly. What actions can Calvert take to reduce its costs? Begin by calculating the total labor costs, then calculate the total costs. (If a box is not used in the table, leave the box empty; do not enter a zero. Round your answers to the nearest whole dollar.) Its income statement for 2017 is as follows: The percentage of time spent by professional staff on various activities follows: Requirement 1. How much of the total costs in 2017 are value-added, non-value-added, or in the gray area between? Explain your answers briefly. What actions can Calvert take to reduce its costs? Begin by calculating the total labor costs, then calculate the total costs. (If a box is not used in the table, leave the box empty; do not enter a zero. Round your answers to the nearest whole dollar.) Correcting errors found in drawings Making changes in response to client requests Correcting errors to meet government building code Total professional labor costs Administrative and support costs Travel Total Requirement 2. What are the consequences of misclassifying a non-value-added cost as a value-added cost? When in doubt, would you classify a cost as a value-added or non-value-added cost? Explain briefly. The consequences of misclassifying a non-value-added cost as a value-added cost are the managers: (Select two that apply.) A. Might not reduce a cost that supports activities a customer does not value. B. Might try to reduce any costs that supports activities the customer does not value. C. May hesitate to reduce these costs thinking that if they eliminate the cost it would reduce the value of customers experience from using the product or service. D. Might reduce costs that provide value or utility (usefulness) customer experiences believing these experiences are not important to thn nicatamar Requirement 3. Suppose Calvert could eliminate all errors so that it did not need to spend any time making corrections and, as a result, could proportionately reduce professional-labor costs. Calculate Calvert's operating income for 2017. (Round your answers to the nearest whole dollar.) Requirement 4. Now suppose Calvert could take on as much business as it could complete, but it could not add more professional staff. Assume Calvert could eliminate all errors so that it does not need to spend any time correcting errors. Assume Calvert could use the time saved to increase revenues proportionately. Assume travel costs will remain at $15,000. Calculate Calvert's operating income for 2017 . Travel Administrative and support costs Total costs Operating income