Prepare cost report that lists value-added costs

Assignment Help Managerial Accounting

Reference no: EM13949779

Willson Company has developed value-added standards for four activities: purchas- ing parts, assembling parts, administering parts, and inspecting parts. The activities, the activity driver, the standard and actual quantities, and the price standards follow for 2005:

Activities	Activity Driver	SQ	AQ	SP
Purchasing parts	Orders	1,500	2,100	$300
Assembling parts	Labor hours	180,000	199,500	12
Administering parts	Number of parts	18,000	25,800	110
Inspecting parts	Inspection hours	0	75,000	15

The actual prices paid per unit of each activity driver were equal to the standard prices.

Required

1. Prepare a cost report that lists the value-added costs, non-value-added costs, and actual costs for each activity.

2. Which activities are non-value-added? Explain why. Explain why value-added activities can have non-value-added costs.

Reference no: EM13949779

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