Bmgt 321 Chapter 13 Homework Essay
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13-16 Value-added, nonvalue-added costs.
The Magill Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2013 is as follows:
1. Classify each cost as value-added, non-value-added, or in the gray area between.
2. For any cost classified in the gray area, assume 60% is value-added and 40% is non-value-added. How much of the total of all seven costs is value-added and how much is non-value-added?
3. Magill is considering the following changes: (a) introducing quality-improvement programs whose net effect will …show more content…
Calvert Associates prepares architectural drawings to conform to local structural-safety codes. Its income statement for 2013 is as