Question

AQ 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 20xl (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 5,600 28,500 $9 Assembly Labor hours 117,000 142,500 7 Expediting Orders expedited 0 9,500 22 Storing Number of units 0 19.000 3 Assume that at the beginning of 20x2, Cicleta trained the assembly workers in a new approach that had the objective of increasing the efficiency of the assembly process. Cicleta also began moving toward a JIT purchasing and manufacturing systern. When JIT is fully implemented, the demand for expediting is expected to be virtually eliminated. It is expected to take Lwo to three years for full implementation. Assume that receiving cost is a step-fixed cost with steps of 700 orders. The other three activities employ resources that are acquired as used and needed. At the end of 20x2, the following results were reported for the four activities: : Activity Activity Driver sQ AQ SP 5,600 5,600 $9 Receiving orders Labor hours 112,500 115,500 7 Receiving Assembly Expediting Storing 0 4,500 22 Orders expedited Number of units 0 9.000 3 Required: all increases negative 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 decreases as positive amounts amounts.i.e. if 20xl was 150,000 and 20x2 was 250,000 that would be an increase and would need to be entered as a negative amount. 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 $ Assembly Expediting Storing S Total

Answer 1

2011
Activity	Activity Driver	SQ	AQ	SP	Non Value added Cost (AQ - SQ)*SP
Receiving	Receiving Orders	$ 5600	$ 28500	$ 9	$ 206100
Assembly	Labour hours	117000	142500	7	178500
Expediting	Orders expedited	0	9500	22	209000
Storing	Number of unit	0	19000	3	57000
2012
Activity	Activity Driver	SQ	AQ	SP	Non Value added Cost (AQ - SQ)*SP
Receiving	Receiving Orders	$ 5600	$ 5600	$ 9	$ 0
Assembly	Labour hours	112500	115500	7	21000
Expediting	Orders expedited	0	4500	22	99000
Storing	Number of unit	0	9000	3	27000
Cicleta Manufacturing
Trend Reporting for Non-Value Added Costs
For the Years 2011 and 2012
Activity	2011	2012	Changes
Receiving	$ 206100	$ 0	$ 206100
Assembly	178500	21000	157500
Expediting	209000	99000	110000
Storing	57000	27000	30000
Total	$ 650600	$ 147000	$ 503600

Hope You Understood. If you have any doubt please leave a comment. Thank You