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McCawl Company 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 2009 are as follows:
The actual price paid per unit of each activity driver were equal to the standard prices. Required: 1) Prepare a cost report that lists the value-added, non-value added, and actual cost for each activity. 2) Which activities are non-value-added? Explain why. Also, explain why value-added activities can have non-value-added costs.
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