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Business, 02.08.2019 17:30, bandithcarroyuqhi
The magill repair shop repairs and services machine tools. a summary of its costs (by activity) for 2017 is as follows: a. materials and labor for servicing machine tools$1,100,000b. rework costs90,000c. expediting costs caused by work delays65,000d. materials-handling costs80,000e. materials-procurement and inspection costs45,000f. preventive maintenance of equipment55,000g. breakdown maintenance of equipment75,0001. 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 60% is value-added and 40% is non-value-added. how much of the total of all seven costs is value-added and how much is non-value-added? 3. magill is considering the following changes: (a) introducing quality-improvement programs whose net effect will be to reduce rework and expediting costs by 40% and materials and labor costs for servicing machine tools by 5%; (b) working with suppliers to reduce materials-procurement and inspection costs by 20% and materials-handling costs by 30%; and (c) increasing preventive-maintenance costs by 70% to reduce breakdown-maintenance costs by 50%. 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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The magill repair shop repairs and services machine tools. a summary of its costs (by activity) for...
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