invoker eBook Video Nonvalue-Added Costs Boothe Inc. has the following two activ

Question

invoker eBook Video Nonvalue-Added Costs Boothe Inc. has the following two activities: (1) Retesting reworked products, cost: $447,000 The retesting cost of the most efficient competitor is $150,000. (2) Welding subassemblies, cost: $901,000 (45,000 welding hours), A benchmarking study reveals that the most efficient level for Boothe would use 36,000 welding hours and entail a cost of $720,800 Required: Determine the nonvalue-added cost of each activity. Do not round values in intermediate calculations, but round your final answers to the nearest dollar Retesting Welding 297,000 × 182,200x See Comerstone 7-7 Learning Objective 4 check My or Previous Next 8 9

Explanation / Answer

Non value added cost:

Retesting=$447,000

Retesting of reworked product is a non value added cost. So nonvalue added cost here is $447,000.

Welding : non value added cost of welding is $180,200 (901,000-720,800).

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