Please provide solution as same format in question. Thanks. Calculation of Value-Added and Non-Value-Added Costs, Activity Volume and Unused Capacity VariancesRico Company produces custom-made machine parts. Rico recently has implemented an activity-based management (ABM) system with the objective of reducing costs. Rico has begun analyzing each activity to determine ways to increase itsefficiency. Setting up equipment was among the first group of activities to be carefully studied. The study revealed that setup hours was a good driver for the activity. During the last year, the company incurred fixed setup costs of $637,560 (salariesof 14 employees). The fixed costs provide a capacity of 28,980 hours (2,070 per employee at practical capacity). The setup activity was viewed as necessary, and the value-added standard was set at 2,070 hours. Actual setup hours used in the mostrecent period were 27,280.Required:1. Calculate the volume and unused capacity variances for the setup activity. Enter all amounts as positive values.Volume VarianceUnused Capacity Variance2. Prepare a report that presents value-added, non-value-added, and actual costs for setup.Rico CompanyValue- and Non-Value-Added Cost ReportValue-Added Non-Value-Added ActualSetting up $

In accounting, a variance is a difference between an anticipated amount and the actual amount.…

of value-Added and non-value-Added Costs, Activity volume and onosed Capacity variance Rico Company produces custom-made machine parts. Rico recently has implemented an activity-based management (ABM) system with the objective of reducing costs. Rico has begun analyzing each activity to determine ways to increase its efficiency. Setting up equipment was among the first group of activities to be carefully studied. The study revealed that setup hours was a good driver for the activity. During the last year, the company incurred fixed setup costs of $637,560 (sala of 14 employees). The fixed costs provide a capacity of 28,980 hours (2,070 per employee at practical capacity). The setup activity was viewed as necessary, and the value-added standard was set at 2,070 hours. Actual setup hours used in the recent period were 27,280. Required: 1. Calculate the volume and unused capacity variances for the setup activity. Enter all amounts as positive values. Volume Variance Unused Capacity Variance 2. Prepare a report that presents value-added, non-value-added, and actual costs for setup. Rico Company Value- and Non-Value-Added Cost Report Value-Added Non-Value-Added Actual