Taft Company prepared the following factory overhead report from its general ledger:
Indirect labor ........$300,000
Fringe benefits .......30,000
Supplies ...........70,000
Depreciation ........100,000
Total ..........$500,000
The management of Taft Company was dissatisfied with this report and asked the controller to prepare an activity analysis of the same information. This activity analysis was as follows:

Interpret the activity analysis by identifying value-added and non-value-added activity costs. How does the activity cost report differ from the general ledgerreport?

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$105,000 100,000 90,000 70,000 65,000 50,000 20,000 $500,000 21% 20 Processing sales orders Disposing scrap Expediting work orders Producing parts Resolving supplier quality problems Reissuing corrected purchase orders Expediting customer orders 13 10 4 100% Total