Cost Report, Value-Added and Non-Value-Added Costs
Sanford, Inc., has developed value-added standards for four activities: purchasing parts, receiving parts, moving parts, and setting up equipment. The activities, the activity drivers, the standard and actual quantities, and the price standards for 20×1 are as follows: Activities Activity Driver SQ AQ SP Purchasing parts Purchase orders 2,300 4,140 $155 Receiving parts Receiving orders 4,600 6,800 210 Moving parts Number of moves 0 3,500 280 Setting up equipment Setup hours 0 8,300 260
The actual prices paid per unit of each activity driver were equal to the standard prices.
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1. Prepare a cost report that lists the value-added, non-value-added, and actual costs for each activity. If an amount is zero, enter “0”. Sanford, Inc. Value- and Non-Value-Added Cost Report For the Year Ended December 31, 20×1 Value-Added Non-Value-Added Actual Purchasing parts $ $ Receiving parts Moving parts Setting up equipment Total $ $ $
2. Which activities are non-value-added?