The Raleigh plant manager of Allentown Corp. has noticed the plant frequently

changes the schedule on its production line. He has gathered the following information on the

activities, estimated times, and average costs required for a single schedule change.

Activity Est. Time Average Cost

Review impact of change on orders . . . . . . . . . . . . . . . . . . . . 30 min. 2 hrs. $ 300

Reschedule production orders . . . . . . . . . . . . . . . . . . . . . . . . 15 min.24 hrs. 875

Stop production and change over to new process . . . . . . . . . 10 min. 3 hrs. 150

Locate inventory produced under old process . . . . . . . . . . . . 20 min. 6 hrs. 1,500

Remanufacture old inventory to conform to new process . . . 3 hrs.20 hrs. 6,000

Generate new production paperwork . . . . . . . . . . . . . . . . . . . 15 min. 4 hrs. 500

Change purchasing schedule. . . . . . . . . . . . . . . . . . . . . . . . . 10 min. 8 hrs. 2,100

Collect paperwork from the floor. . . . . . . . . . . . . . . . . . . . . . . 5 min.15 min. 75

Review new line schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 min.30 min. 100

Pay overtime premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 hrs. 5 hrs. 1,000

Total costs required for a single schedule change. . . . . . . . . $6,600

a. Which, if any, of these activities are value-added?

b. What is the cost driver in this situation?

c. How can the cost driver be controlled and the NVA activities eliminated?