The McMannis Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2017 is as follows: |(Click the icon to view data.) Read the requirements. 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 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 Requirements Data table a. Materials and labor for servicing machine tools $ 350,000 b. Rework costs 50,000 120,000 25,000 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. 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 35,000 40,000 110,000 Print Done Print Done