Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Sanford, Inc., has developed value-added standards for four activities: purchasing parts, receiving parts, moving parts, and setting up equipment. The activities, the activity drivers, the
Sanford, Inc., has developed value-added standards for four activities: purchasing parts, receiving parts, moving parts, and setting up equipment. The activities, the activity drivers, the standard and actual quantities, and the price standards for 20x1 are as follows: Activities Activity Driver SQ AQ SP Purchase orders 2,600 3,640 $300 Purchasing parts Receiving parts Receiving orders 5,200 7,800 195 Moving parts Number of moves 0 2,600 390 Setting up equipment Setup hours 0 10,400 117 The actual prices paid per unit of each activity driver were equal to the standard prices. Suppose that for 20x2, Sanford, Inc., has chosen suppliers that provide higher-quality parts and redesigned its plant layout to reduce material movement. Additionally, Sanford implemented a new setup procedure and provided training for its purchasing agents. As a consequence, less setup time is required and fewer purchasing mistakes are made. At the end of 20x2, the following information is provided. Activities Activity Driver SQ AQ SP Purchase orders 2,600 $300 3,120 6,500 Receiving orders 5,200 195 Purchasing parts Receiving parts Moving parts Setting up equipment Number of moves 0 840 395 Setup hours 0 2,600 117 Required: Prepare a report that compares the non-value-added costs for 20x2 with those of 20x1. Enter all your answers as positive amounts. Sanford, Inc
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started