Chapter 12, Problem 15E

Refer to Exercise 12.14. Suppose that for 20x2, Sanford, Inc., has chosen suppliers that provide higher-quality parts and redesigned its plant layout to reduce material movement. Additionally, Sanford implemented a new setup procedure and provided training for its purchasing agents. As a consequence, less setup time is required and fewer purchasing mistakes are made. At the end of 20x2, the information shown on page 680 is provided.

Required:

1. 1. Prepare a report that compares the non-value-added costs for 20x2 with those of 20x1.
2. 2. What is the role of activity reduction for non-value-added activities? For value-added activities?
3. 3. Comment on the value of a trend report.