Question: The Mack Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2017 is as follows: (Click the icon to



The Mack Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2017 is as follows: (Click the icon to view data.) Read the requirements. Requirement 1. Classify each cost as value-added, non-value-added, or in the gray area between. Compute the total cost for the value-added and nonvalue-added costs, then compute what percentage of the total is value-added and how much is non-value-added. costs by 20%. Calculate the effect of programs (a), (b), and (c) on value-added costs, non-value-added costs, and total costs. Comment briefly. is not used in the table, leave the box empty; do not enter a zero. Use parentheses or a minus sign to show a reduction.) 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 38% is value-added and 62% is non-value-added. How much of the total of all seven costs is value-added and how much is non-value-added? 3. Mack is considering the following changes: (a) introducing quality-improvement programs whose net effect will be to reduce rework and expediting costs by 80% and materials and labor costs for servicing machine tools by 5%; (b) working with suppliers to reduce materials-procurement and inspection costs by 50% and materials-handling costs by 40%; and (c) increasing preventive-maintenance costs by 40% to reduce breakdown-maintenance costs by 20%. Calculate the effect of programs (a), (b), and (c) on value-added costs, non-value-added costs, and total costs. Comment briefly
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