Boysenberry Company Recorded the Following Activities in the Current Year

Essay

Boysenberry Company recorded the following activities in the current year. Determine the amount of value-added and non-value-added costs in each of the activities performed.
a.Boysenberry keeps 5 days of materials inventory on hand to avoid shutdowns due to materials shortages.Carrying costs are $18,000 per day.
b.A time-and-motion study revealed that it should take 15 minutes to produce a product that now takes 45 minutes to produce.Labor cost is $16 per hour.
c.Warranty work costs the firm $200,000 per year. Warranty costs for the industry average $50,000 per year.