Refer to Exercise 12.14. Suppose that for 2016, 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 2014, the information shown on page 668 is provided.

Required:
1. Prepare a report that compares the non-value-added costs for 2016 with those of 2015.
2. What is the role of activity reduction for non-value-added activities? For value-added activities?
3. Comment on the value of a trend report.

Transcribed Image Text:

sQ 2,600 5,200 Activities Activity Driver Purchase orders Receiving orders Number of moves Setup hours AQ Purchasing parts Receiving parts Moving parts Setting up equipment 3,120 6,500 840 2,600 SP $300 195 395