cost accounting ch04 kinney and raiborn13. LO.1 (Activity analysis)
The Raleigh plant manager of Allentown Corp. has noticed the
plant frequently changes the schedule on its production line. He has gathered the following
information on the activities, estimated times, and average costs required for single schedule
Review impact of change on orders
Reschedule production orders
Stop production and change over to new process
Locate inventory produced under old process
Remanufacture old inventory to conform to new process
Generate new production paperwork
Change purchasing schedule
Collect paper work from the floor
Review new line schedule
Pay overtime premiums
Total costs required for a single schedule change
A. Which, if any, of these activities are value-added?
B. What is the cost driver in this situation?
C. How can the cost driver be controlled and the NVP activities eliminated?
14. LO.1 (Activity analysis; research)
Go to a local department or grocery store.
a. List five packaged items for which it is readily apparent that packaging is essential and,
therefore, would be considered value-added.
b. list five packaged items for which its is readily apparent that packaging is nonessential and
therefore adds no value.
c. For each item listed in (b), indicate why you think the item was packaged rather than left
15. LO.1 (Activity analysis
) The following activities are common at Pisana’s Department Store.
received with barcodes attached that can be read by scanners but not by
Attending trade shows to view new products
Reviewing supplier catalogs
Waiting for shipments to be received
Inspecting goods for damage