Randolph 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 2017 are as follows:

Activities Activity Driver SQ AQ SP

Purchasing Parts Purchase Orders 3,400 3,500 $420

Receiving Parts Receiving Orders 6,700 6,860 210

Moving Parts Number of Moves 0 3,120 625

Setting up Equipment Setup Hours 0 12,380 145

Note: The actual prices paid per unit of each activity driver were equal to the standard prices.

Part A Prepare a cost report that lists the value-added, non-value-added, and actual costs for each activity.

Part B Identify which activities are non-value added and explain why. Why do value-added activities have a component of non-value-added costs?