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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 professionaabor costs. Consider each requirement independently Read the requirements 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 (1 a box is not used in the table, mave the box empty, do not enter a zero. Round your answers to the nearest whole dotar) Value Gray Non-value Added Area Added Total Making calculations and preparing drawings Checking calculations and drawings Correcting errors found in drawings Making changes in response to client requests Correcting errors to meet government building code Totul professional labor could Administrative and support costs Travel Total The percentage of time spent by professional staff on various activities follows: Making calculations and preparing drawings for clients 77% Checking calculations and drawings 3 Correcting errors found in drawings (not billed to clients) 8 Making changes in response to client requests (billed to clients) Correcting own errors regarding building codes (not billed to 7 clients) 100 % Total 5 Its income statement for 2017 is as follows: $ 701,250 Revenues Salaries of professional staff (7,500 hours * $52 per hour) Travel Administrative and support costs Total costs 390,000 15,000 171,600 576,600 $ 124,650 Operating income Select the appropriate cost classfication, then select the action that Calvert can take to reduce is costs Donections and responding to die regts for changes Remers for the service of preparing architus drawings Dosed on correct en wings and making changes boksa hey were inconsistent with big codes Customer tom Checking calculation and dig for degreement on the desficient Calvertrouwen die mees by making sure Requirement 2. What are the consequence of macultym rodas sus cost? When in doute, would you chaty a cow as a voud of rowadded cos? Explan town There is no vue de 2011 sa te cost are the manage the story DA Moto reduce cat support a customer dose not valin Monteluce anycosts apports de comer does nove My hesitate to reduce these costs ning that they were cost it would reduce the wue ofers experience from the product or service Da, Might radits costs that primidai valan aruny taluinnal tamar apariareas builarig ta Important in the came When in doubt, would you clasally acostas a value-added or ne-added cost? Explain briefly When in doubt, a manager of costs as because it Requirement 3. Suppose Calvert could alminate al centralt Sd not need to spend any time making correction and as a result, could proportionately redura professional labor costs Calculata Calverts operating income for 2017 Round your answers to the nearest while dolu Current operating income Cost amrgs ti paataaranat tatar can Cost savingen ble avvendor Adil Total coins Operating income in 2017 arrested Requiremente. Now suppose Cover could be on as much to completo, but could not add more profesional statt Ansume Cover could note los setores not need to spend any time correcting enors Assume Calvert could use the smesed to create the proportionately Amtume travel costs woman at $15.000. Call Calvertaling income for 2017 How Professional labor cos Travni Administrative and support con Operating income
