Check My Work eBook Cornerstone Exercise 12.2 (Algorithmic) Trend Reporting for Non-Value Added Costs Cicleta Manufacturing has four activities: receiving materials, assembly, expediting products, and storing goods. Receiving and assembly are necessary activities; expediting and storing goods are unnecessary. The following data pertain to the four activities for the year ending 2014 (actual price per unit of the activity driver is assumed to be equal to the standard price): Activity Driver Activity SQ AQ SP Receiving Receiving orders 7,200 8,000 $12 75,000 90,000 Assembly Labor hours Expediting Orders expedited 6,000 29 Storing Number of units 12,000 Assume that at the beginning of 2015, Cicleta trained the assembly workers in a new approach that had the objective of increasing the efficiency of the assembly process. Cicleta also began moving toward a JIT purchasing and manufacturing system. When JIT is fully implemented, the demand for expediting is expected to be virtually eliminated. It is expected to take two to three years for full implementation. Assume that receiving cost is a step-fixed cost with steps of 900 orders. The other three activities employ resources that are acquired as used and needed. At the end of 2015, the following results were reported for the four activities: Activity Activity Driver AQ SP SQ 12,000 Receiving Receiving orders 2,000 $21 100,000 103,000 15 Assembly Labor hours Expediting Orders expedited 4,000 50 8,000 7 Storing Number of units Required