Value-added, non-value-added costs. The Magill Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2017 is as follows: 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 $1,100,000 90,000 65,000 80,000 45,000 55,000 75,000

Value-added, non-value-added costs. The Magill Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2017 is as follows: 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 $1,100,000 90,000 65,000 80,000 45,000 55,000 75,000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EA: Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on...

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Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases. a. Direct material cost per unit. b. Fees for using a patent of $500,000 plus $0.25 for each unit produced. c. Salary of quality control supervisor. d. Straight-line depreciation per unit on factory equipment. e. Total direct materials cost.
Value-added, non-value-added costs. The Magill Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2017 is as follows: a. Materials and labor for servicing machine tools $1,100,000 b. Rework costs 90,000 c. Expediting costs caused by work delays 65,000 d. Materials-handling costs 80,000 e. Materials-procurement and inspection costs 45,000 f. Preventive maintenance of equipment 55,000 g. Breakdown maintenance of equipment 75,000 Required: Classify each cost as value-added, non-value-added, or in the gray area between. For any cost classified in the gray area, assume 60% is value-added and 40% is non-value-added. How much of the total of all seven costs is value-added and how much is non-value-added? Magill is considering the following changes: (a) introducing quality-improvement programs whose net effect will be to reduce rework and expediting costs by 40% and materials and labor costs for…
Value-added, non-value-added costs. The Magill Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2017 is as follows:
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Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $50,400 Training of machine operators 26,300 Processing returned products 15,700 Scrap processing (disposal) 24,100 Rework 7,500 Preventative maintenance 28,800 Product design 44,900 Warranty work 9,400 Finished goods inspection 22,300 From the provided schedule of activity costs, determine the non-value-added costs. a.$114,500 b.$56,700 c.$229,400 d.$47,300
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