Nonvalue-Added CostsLemmons Inc. has the following two activities: (1) Retesting reworked products, cost: $446,000. The retesting cost of the most efficientcompetitor is $225,000. (2) Welding subassemblies, cost: $1,080,000 (67,500 welding hours). A benchmarking study reveals that the mostefficient level for Lemmons would use 54,000 welding hours and entail a cost of $864,000.Required:Determine the nonvalue-added cost of each activity.Nonvalue-added cost:Retesting$ 221,000 XWelding$216,000 ✓

The non-value-added cost is calculated by deducting the efficiency rate from the actual rate and…

Answered: Required: Determine the nonvalue-added…

Required: Determine the nonvalue-added cost of each activity. Retesting Nonvalue-added cost: $221,000 X Welding 216,000 ✓

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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