Problem 7-6 1 Nonvalue-Added Costs, Activity Costs, Cost Reduction Activity John Thomas, vice president of Mallett Company (a producer of a variety of plastic products), has been supervising the implementation of an ABC management system. John wants to improve process efficiency by improving the activities that define the processes. To illustrate the potential of the new system to the president, John has decided to focus on two processes: production and Customer service. (Continued)