Classifying Activities According to Level, Determining Value Added or Nonvalue Added
Summer Company manufactures flowerpots in several different sizes and has identified the following activities in its manufacturing process.
Storing inventory
Creating molds
Pouring plaster
Firing pots in kiln
Sanding and finishing
Painting
Performing quality control
Ordering materials
Delivering orders to customers
Insuring the manufacturing facility
Reconfiguring machinery between batches
Required:
1.Classify each activity listed as facility, product, customer, batch, or unit level.
2. Identify a cost driver for each activity listed.
3. Indicate whether each activity is value added or nonvalue added.
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