either value-added or non–value-added.
Anna Bellatorre Inc. is interested in using its activity-based costing system to improve its operating efficiency and its profit margins by applying activity-based management techniques. As part of this undertaking, you have been asked to classify its plant activities as value-added or non–value-added.
Using the list of activities below, classify each activity as either value-added or non–value-added.
| (a) | Designing new models | ||||
| (b) | Purchasing raw materials and parts | ||||
| (c) | Storing and managing inventory | ||||
| (d) | Receiving and inspecting raw materials and parts | ||||
| (e) | Interviewing and hiring new personnel | ||||
| (f) | Machine forming sheet steel into appliance parts | ||||
| (g) | Manually assembling parts into appliances | ||||
| (h) | Training all employees of the company | ||||
| (i) | Insuring all tangible fixed assets | ||||
| (j) | Supervising production | ||||
| (k) | Maintaining and repairing machinery and equipment | ||||
| (l) | Painting and packaging finished appliances |
Homework Answers
VAL ADDED a. Designing new models
NON VAL b. Purchasing raw materials and parts
NON VALc. Storing and managing inventory
NON VAL d. Receiving and inspecting raw materials and parts
NON VAL e. Interviewing and hiring new personnel
VAL ADDED f. Machine forming sheet steel into appliance parts
VAL ADDED g. Manually assembling parts into appliances
NON VAL h. Training all employees of the company
NON VAL i. Insuring all tangible fixed assets
NON VAL j. Supervising production
NON VAL k. Maintaining and repairing machinery and equipment
VAL ADDED l. Painting and packaging finished appliances
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