Chapter 13, Problem 13.16E

1.

a.

To determine

To explain: The classification cost as value added and non value added cost.

b.

To determine

To explain: The classification cost as value added and non value added cost.

c.

To determine

To explain: The classification cost as value added and non value added cost.

d.

To determine

To explain: The classification cost as value added and non value added cost.

e.

To determine

To explain: The classification cost as value added and non value added cost.

f.

To determine

To explain: The classification cost as value added and non value added cost.

g.

To determine

To explain: The classification cost as value added and non value added cost.

2.

To determine

To compute: The breakup of value added and non value added.

Given information:

2013,

Cost of material and labor for servicing machine tools is $1,100,000.

Cost of material procurement and inspection cost is $45,000.

Cost of preventive maintenance of equipment is $55,000

Rework cost is $90,000.

Expediting cost caused by work delays is $65,000.

Material handling cost is $80,000.

Breakdown maintenance of equipment is $75,000.

3.

To determine

To compute: The amount that is to be reduced after making changes in (a), (b), and (c).