Value-added, non-value-added costs. The Magill Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2017 is as follows: a. Materials and labor for servicing machine tools b. Rework costs c. Expediting costs caused by work delays d. Materials-handling costs e. Materials-procurement and inspection costs f. Preventive maintenance of equipment g. Breakdown maintenance of equipment $1,100,000 90,000 65,000 80,000 45,000 55,000 75,000
Value-added, non-value-added costs. The Magill Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2017 is as follows: a. Materials and labor for servicing machine tools b. Rework costs c. Expediting costs caused by work delays d. Materials-handling costs e. Materials-procurement and inspection costs f. Preventive maintenance of equipment g. Breakdown maintenance of equipment $1,100,000 90,000 65,000 80,000 45,000 55,000 75,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Q.Classify each cost as value-added, non-value-added, or in the gray area between.
Transcribed Image Text:Value-added, non-value-added costs. The Magill Repair Shop repairs and services machine tools.
A summary of its costs (by activity) for 2017 is as follows:
a. Materials and labor for servicing machine tools
b. Rework costs
c. Expediting costs caused by work delays
d. Materials-handling costs
e. Materials-procurement and inspection costs
f. Preventive maintenance of equipment
g. Breakdown maintenance of equipment
$1,100,000
90,000
65,000
80,000
45,000
55,000
75,000
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