Evans Inc. has the following two activities: (1) Reworking products, cost: $740,000. The reworking cost of the
Question:
Evans Inc. has the following two activities:
(1) Reworking products, cost: $740,000. The reworking cost of the most efficient similar-sized competitor is $200,000.
(2) Purchasing parts, cost: $900,000 (45,000 purchasing hours). A benchmarking study reveals that the most efficient level for Evans would use 24,000 purchasing hours and entail a cost of $450,000.
Required:
Determine the nonvalue-added cost of each activity.
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Reworking Nonvalue Added Cost 740000 Reworking is a ...View the full answer
Answered By
Jehal Shah
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Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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