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 Requirement 2. For any cost classified in the gray area, assume96%is value-added and4%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 costof total costsValue-added %Non-value-added %Total costs Requirement 3.Macallisteris considering the following changes: (a) introducing quality-improvement programs whose net effect will be to reduce rework and expediting costs by60%and materials and labor costs for servicing machine tools by5%;(b) working with suppliers to reduce materials-procurement and inspection costs by10%and materials-handling costs by30%;and (c) increasing preventive-maintenance costs by70%to reduce breakdown-maintenance costs by50%.Calculate the effect of programs (a), (b), and (c) on value-added costs, non-value-added costs, and total costs. Comment briefly. Begin by calculating the effect of program: (a) introducing quality-improvement programs whose net effect will be to reduce rework and expediting costs by60%and materials and labor costs for servicing machine tools by5%.(If an input field is not used in the table, leave the input field empty; do not enter a zero. Use parentheses or a minus sign to show a reduction.) Value-Non-value- ProgramaddedaddedGray area(a)Quality improvement programs to: reduce rework costs by 60% reduce expediting costs by 60% reduce materials and labor costs by 5% Total effect Next, calculate the effect of program: (b) working with suppliers to reduce materials-procurement and inspection costs by10%and materials-handling costs by30%.(If an input field is not used in the table, leave the input field empty; do not enter a zero. Except for the last row of the table. For amounts in the last row, make sure to enter a "0" for any zero balance. Use parentheses or a minus sign to show a reduction.) Value-Non-value- ProgramaddedaddedGray area(b)Working with suppliers to: reduce materials procurement and inspection costs by 10% reduce materials handling costs by 30% Total effect Transferring gray area costs to value-added and non-value-added Effect on value-added and non-value-added costs Now, calculate the effect of program: (c) increasing preventive-maintenance costs by70%to reduce breakdown-maintenance costs by50%.(If an input field is not used in the table, leave the input field empty; do not enter a zero. Except for the last row of the table. For amounts in the last row, make sure to enter a "0" for any zero balance. Use parentheses or a minus sign to show a reduction.) Value-Non-value-In theProgramaddedaddedgray area(c)Maintenance programs to: increase preventive maintenance costs by 70% decrease breakdown maintenance costs by 50% Total effect Transferring gray area costs to value-added and non-value-added Effect on value-added and non-value-added costs Finally, calculate the total costs for each program. (If an input field is not used in the table, leave the input field empty; do not enter a zero. Use parentheses or a minus sign to show a reduction.) Value-Non-value- ProgramaddedaddedTotal Total effect of all programs Total costs for value-added and non-value-added, respectively Expected value-added and non-value-added costs as a result of these programs Comment briefly. (Round the percentages to the nearest whole percent.) If these programs are implemented in 2020, total costs would a total of . The percentage of non-value-added costs to % and value-added costs to %. Data Tablea. Materials and labor for servicing machine tools $ 1,000,000b. Rework costs120,000c. Expediting costs caused by work delays70,000d. Materials-handling costs65,000e. Materials-procurement and inspection costs105,000f. Preventive maintenance of equipment80,000g. Breakdown maintenance of equipment110,000PrintDone

Question

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 Requirement 2. For any cost classified in the gray​ area, assume96​%is​ value-added and4​%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 costof total costsValue-added  %Non-value-added  %Total costs   Requirement 3.Macallisteris considering the following​ changes: (a) introducing​ quality-improvement programs whose net effect will be to reduce rework and expediting costs by60​%and materials and labor costs for servicing machine tools by5​%;​(b) working with suppliers to reduce​ materials-procurement and inspection costs by10​%and​ materials-handling costs by30​%;and​ (c) increasing​ preventive-maintenance costs by70​%to reduce​ breakdown-maintenance costs by50​%.Calculate the effect of programs​ (a), (b), and​ (c) on​ value-added costs,​ non-value-added costs, and total costs. Comment briefly. Begin by calculating the effect of​ program: (a) introducing​ quality-improvement programs whose net effect will be to reduce rework and expediting costs by60​%and materials and labor costs for servicing machine tools by5​%.​(If an input field is not used in the​ table, leave the input field​ empty; do not enter a zero. Use parentheses or a minus sign to show a​ reduction.)   Value-Non-value- ProgramaddedaddedGray area(a)Quality improvement programs to:    reduce rework costs by 60%    reduce expediting costs by 60%    reduce materials and labor costs by 5%    Total effect   ​Next, calculate the effect of​ program: (b) working with suppliers to reduce​ materials-procurement and inspection costs by10​%and​ materials-handling costs by30​%.​(If an input field is not used in the​ table, leave the input field​ empty; do not enter a zero. Except for the last row of the table. For amounts in the last​ row, make sure to enter a​ &#34;0&#34; for any zero balance. Use parentheses or a minus sign to show a​ reduction.)   Value-Non-value- ProgramaddedaddedGray area(b)Working with suppliers to:    reduce materials procurement and inspection costs by 10%    reduce materials handling costs by 30%    Total effect    Transferring gray area costs to value-added and non-value-added    Effect on value-added and non-value-added costs   ​Now, calculate the effect of​ program: (c) increasing​ preventive-maintenance costs by70​%to reduce​ breakdown-maintenance costs by50​%.​(If an input field is not used in the​ table, leave the input field​ empty; do not enter a zero. Except for the last row of the table. For amounts in the last​ row, make sure to enter a​ &#34;0&#34; for any zero balance. Use parentheses or a minus sign to show a​ reduction.)   Value-Non-value-In theProgramaddedaddedgray area(c)Maintenance programs to:    increase preventive maintenance costs by 70%    decrease breakdown maintenance costs by 50%    Total effect    Transferring gray area costs to value-added and non-value-added    Effect on value-added and non-value-added costs   ​Finally, calculate the total costs for each program. ​(If an input field is not used in the​ table, leave the input field​ empty; do not enter a zero. Use parentheses or a minus sign to show a​ reduction.)   Value-Non-value- ProgramaddedaddedTotal Total effect of all programs    Total costs for value-added and non-value-added, respectively    Expected value-added and non-value-added costs as a result of these programs   Comment briefly. ​(Round the percentages to the nearest whole​ percent.) If these programs are implemented in 2020, total costs would a total of .  The percentage of non-value-added costs to % and value-added costs to %. Data Tablea. Materials and labor for servicing machine tools $ 1,000,000b. Rework costs120,000c. Expediting costs caused by work delays70,000d. Materials-handling costs65,000e. Materials-procurement and inspection costs105,000f. Preventive maintenance of equipment80,000g. Breakdown maintenance of equipment110,000PrintDone

Accepted Answer

Given:
The data is given as below,

		Value-	Non-value-
Program	added	added	Total
	Total effect of all programs
	Total costs for value-added and non-value-added, respectively
	Expected value-added and non-value-added costs as a result of these programs

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

		Total percent
	Total cost	of total costs
Value-added			%
Non-value-added			%
Total costs

		Value-	Non-value-	In the
Program	added	added	gray area
(c)	Maintenance programs to:
	increase preventive maintenance costs by 70%
	decrease breakdown maintenance costs by 50%
	Total effect
	Transferring gray area costs to value-added and non-value-added
	Effect on value-added and non-value-added costs

If these programs are implemented in 2020, total costs would		a total of		.
The percentage of non-value-added costs		to		% and value-added costs		to		%.

ts caused by work delays d. Materials-handling costs e. Materials-procurement and inspection costs f. Preventive maintenance of equipment g. Breakdown maintenance of equipment