Refer to Exercise 12-9. Suppose that for 2010, McCawl Company has chosen suppliers that provide higher-quality parts and redesigned its plant layout to reduce material movement. Additionally, McCawl 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 2010, the following information is provided:

Required:
1. Prepare a report that compares the non-value-added costs for 2010 with those of
2009.
2. What is the role of activity reduction for non-value-added activities? For value added activities?
3. Comment on the value of a trendreport.

Transcribed Image Text:

Activities Activity Driver AQ SP 1,000 1,200 I Purchasing parts Rcceiving parts Moving parts Sctting up equipment Purchase orders Receiving orders Number of moves Setup hours S150 2,000 0 0 2,400 400 1,000 200 60