Determine the nonvalue-added cost of each activity

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Question - Nonvalue-Added Costs - Lemmons Inc. has the following two activities:

(1) Retesting reworked products, cost: $484,000. The retesting cost of the most efficient competitor is $225,000.

(2) Welding subassemblies, cost: $877,500 (67,500 welding hours). A benchmarking study reveals that the most efficient level for Lemmons would use 54,000 welding hours and entail a cost of $702,000.

Required - Determine the nonvalue-added cost of each activity.

Reference no: EM132715652

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