Value- and Non-Value-Added Cost Reporting

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 2014 (actual price per unit of the activity driver is assumed to be equal to the standard price):

Activity	Activity Driver	SQ	AQ	SP
Receiving	Receiving orders	7,200	30,000	$12
Assembly	Labor hours	123,000	150,000	9
Expediting	Orders expedited	0	10,000	29
Storing	Number of units	0	20,000	4

Required:

Question Content Area

1. Prepare a cost report for the year ending 2014 that shows value-added costs, non-value-added costs, and total costs for each activity. If an amount is zero, enter "0".

Cicleta Manufacturing Value and Non-Value-Added Cost Report For the Year Ended 2014

Activity	Value-Added Costs	Non-Value-Added Costs	Total Costs
Receiving	$fill in the blank f06754f9d05a004_1	$fill in the blank f06754f9d05a004_2	$fill in the blank f06754f9d05a004_3
Assembly	fill in the blank f06754f9d05a004_4	fill in the blank f06754f9d05a004_5	fill in the blank f06754f9d05a004_6
Expediting	fill in the blank f06754f9d05a004_7	fill in the blank f06754f9d05a004_8	fill in the blank f06754f9d05a004_9
Storing	fill in the blank f06754f9d05a004_10	fill in the blank f06754f9d05a004_11	fill in the blank f06754f9d05a004_12
Total	$fill in the blank f06754f9d05a004_13	$fill in the blank f06754f9d05a004_14	$fill in the blank f06754f9d05a004_15

Question Content Area

2. Explain why expediting products and storing goods are non-value-added activities.