he McMannis Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2017 is as follows SELEN 13 Data table - a. Materials and labor for servicing machine tools $ 820,000 b. Rework costs 85,000 70,000 80,000 50,000 30,000 65,000 c. Expediting costs caused by work delays d. Materials-handling costs e. Materials-procurement and inspection costs f. Preventive maintenance of equipment g. Breakdown maintenance of equipment X Requirements 1. Classify each cost as value-added, non-value-added, or in the gray area between. 2. For any cost classified in the gray area, assume 50% is value-added and 50% is non-value-added. How much of the total of all seven costs is value-added and how much is non-value-added? 3. McMannis is considering the following changes: (a) introducing quality-improvement programs whose net effect will be to reduce rework and expediting costs by 70% and materials and labor costs for servicing machine tools by 10%; (b) working with suppliers to reduce materials-procurement and inspection costs by 30% and materials-handling costs by 20%; and (c) increasing preventive-maintenance costs by 40% to reduce breakdown-maintenance costs by 50%. Calculate the effect of programs (a). (b), and (c) on value-added costs, non-value-added costs, and total costs. Comment briefly.