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Cornerstone Exercise 12.1 (Algorithmic) Value- and Non-Value-Added Cost Reporting Cicleta Manufacturing has four activities: receiving materials,...

Cornerstone Exercise 12.1 (Algorithmic)
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     19,500     $12    
Assembly       Labor hours 81,000     97,500     9    
Expediting       Orders expedited 0     6,500     29    
Storing       Number of units 0     13,000     4    

Required:

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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

$  

$  

$  

Assembly

  

  

  

Expediting

  

  

  

Storing

  

  

  

Total

$  

$  

$  

0 0
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Answer #1

non value added cost means it do not add value to your product .it even increases your cost without addind value

examplereworking defective products ,product inspections and quality controls are non value added costsoverproduction leads to higher storage cost it increases non value added cost

so in the above we have standard and actual so standard is enough for value added cost what we incurring additionally is non value added cost

sol las-salx 12) vaulue a nonvd (OS Eccetvin Asse Oly 240,0 0 (310 yol | lis 00 a- - 14 8 1500 822 00 2 6300X 2g 133,500 | 13

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