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Trend Reporting for Non-Value Added Costs Cicleta Manufacturing has four activities: receiving materials, assembly, expediting products, and storing goods. Receiving and assembly are necessary activities,
Trend Reporting for Non-Value Added Costs Cicleta Manufacturing has four activities: receiving materials, assembly, expediting products, and storing goods. Receiving and assembly are necessary activities, expediting and storing goods are unnecessary. The following data pertain to the four activities for the year ending 20x1 (actual price per unit of the activity driver is assumed to be equal to the standard price): Activity Activity Driver SO SP Receiving Receiving orders 12.000 16,000 $21 Assembly Labur hours 75,000 90,000 15 Expediting Orders expedited 0 6,000 50 sti Storing Number of units D 12.000 7 Assume that at the beginning of 20x2, Geeta trained the assembly workers in a new approach that had the objective of increasing the efficiency of the assembly process. Cicleta also began maving toward a JIT purchasing and manufacturing system. When It is fully implemented, the demand for expediting is expected to be virtually eliminated. It is expected to take two to three years for full implementation. Assume that receiving cost is a step-fixed cost with steps of 1,500 orders. The other three activities employ resources that escuired as well and needed. Alle er ul 20x2, Live Lollowing reulls were reported for the lour activities: Activity Activity Driver SO AQ SP Receiving Receiving anders 12,00 12,COD $21 Assembly Labor hours 75,000 78,000 15 Editing Orders expected 0 3,000 50 Storing Number of units 0 6,000 7 Required: Prepare a trend report that shows the non-value-added costs for each activity for 20x1 and 20x2 and the change in costs for the two periods. Enter all your answers as positive amounts. If an amount is zero, enter "o". Cicleta Manufacturing Trend Report: Non-Value Added Costs For the Years 20x1 and 20x2 Activity 20x1 20x2 Change Receiving 129,600 x 0 129.600 x Assembly Expediting Storing Total Feedback Check My Work A trend report should show the decline in non-value-added costs from one period to the next - provided the activity improvement initiatives are effective
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