Sanford, Inc., has developed value-added standards for four activities: purchasing parts, receiving parts, moving parts, and setting up equipment. The activities, the activity drivers, the standard and actual quantities, and the price standards for 2013 are as follows:

The actual prices paid per unit of each activity driver were equal to the standard prices.
Required:
1. Prepare a cost report that lists the value-added, non-value-added, and actual costs for each activity.
2. Which activities are non-value-added? Explain why. Also, explain why value-added activities can have non-value-added costs.

Transcribed Image Text:

Activities Activity Driver Purchase orders Receiving orders s0 AQ 3,640 S300 7,800 2,600 SP Purchasing parts Receiving parts Moving parts Setting up equipmentSetup hours 2,600 5,200 0 195 390 Number of moves 10,400