Question

Trend Reporting for Non-Value Added Costs 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 20x1 (actual price per unit of the activity driver is assumed to be equal to the standard price): Activity Activity Driver SQAQ SP Receiving Receiving orders 10,400 22,500 $18 Assembly Labor hours 93,000 112,500 13 Expediting Orders expedited 7,500 43 Storing Number of units 0 15,000 6 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 system. When IT is fully implemented, the demand for expediting is expected to be virtually eliminated. It is expected to take two to three years for full implementation. Assume that receiving cost is a step-fixed cost with steps of 1,300 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 A Q SP Receiving Receiving orders 16,800 16,800 Assembly Labor hours 75,000 78,000 Expediting Orders expedited 3,000 Storing Number of units 0 6,000 10 0

Answer 1

Ansewer Non-value addad SP astCA-SXSP Activity Driver AS Activity So $217,800 RecengReceuinoide 1008,S00 918 Assembly expediting orde sepei staring 253,S0o Labos hours 93,oc0 ,saoI 3 7, 50o 3 322,5O0 Nomber of onits aoxa Non-Valve adked sp AG ActivityActiuity niva s Gst (Ag-s9)sp Racesuing Recelvig adky IG,800 1G,800 30o Assembly abor hours5,00078/000 63,00G orders erpedfted Eapedit ing storing Nomber ofits a 3,000 $7 13,000 G,000 10 GO,COO Trend report: Non-value Acked osts for the 20x and 20x years change ar7800 20x2 20XI Recesing 2800 O Asembly Cpenditing$32, So013,00o109,S00 as3,S00$63,000 190,S00 60,000$ storing Total 30/000 $90, 00 G 883,800 336,000$547,800