The McMannis Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2017 is as follows: BE (Click the icon to view data.) Read the requirements b. Requirement 1. Classify each cost as value added, non-value-added, or in the gray area between. a. Materials and labor for servicing machine tools Value added Rework costs Non value added c. Expediting costs caused by work delays Non-value-added d. Materials-handling costs Gray area e. Materials-procurement and inspection costs Gray area f. Preventive maintenance of equipment Gray area g. Breakdown maintenance of equipment Non-value-added Requirement 2. For any cost classified in the gray area, assurrie 15% is value-added and 85% is non-value added. How much of the total of all seven costs is value added and how much is non-value added? Compute the total cost for the value-added and nonvalue-added costs, then compute what percentage of the total is value-added and how much is non-value-added. Total percent Total cost of total costs Value-added Non value added Total costs - X Requirements Data table 350,000 50,000 1. Classify each cost as value-added, non-value-added, or in the gray area between. 2. For any cost classified in the gray area, assume 15% is value-added and 85% is non-value-added. How much of the total of all seven costs is value-added and how much is non-value-added? 3. McMannis is considering the following changes: (a) introducing quality-improvement programs whose net effect will be to reduce rework and expediting costs by 50% and materials and labor costs for servicing machine tools by 5%; (b) working with suppliers to reduce materials-procurement and inspection costs by 30% and materials-handling costs by 10%; and (c) increasing preventive-maintenance costs by 60% to reduce breakdown-maintenance costs by 40%. Calculate the effect of programs (a), (b), and (c) on value-added costs, non-value-added costs, and total costs. Comment briefly. a. Materials and labor for servicing machine tools $ b. Rework costs C. Expediting costs caused by work delays d. Materials-handling costs e. Materials-procurement and inspection costs f. Preventive maintenance of equipment g. Breakdown maintenance of equipment 120,000 25,000 35,000 40,000 Ho 110,000 a Print Done Print Done