Trend Reporting for Non-Value-Added Costs

Cicleta Manufacturing has four activities: receiving materials,assembly, expediting products, and storing goods. Receiving andassembly are necessary activities; expediting and storing goods areunnecessary. The following data pertain to the four activities forthe year ending 20x1 (actual price per unit of the activity driveris assumed to be equal to the standard price):

Activity	Activity Driver	SQ	AQ	SP
Receiving	Receiving orders	12,000	21,000	$21
Assembly	Labor hours	87,000	105,000	15
Expediting	Orders expedited	0	7,000	50
Storing	Number of units	0	14,000	7

Assume that at the beginning of 20x2, Cicleta trained theassembly workers in a new approach that had the objective ofincreasing the efficiency of the assembly process. Cicleta alsobegan moving toward a JIT purchasing and manufacturing system. WhenJIT is fully implemented, the demand for expediting is expected tobe virtually eliminated. It is expected to take two to three yearsfor full implementation. Assume that receiving cost is a step-fixedcost with steps of 1,500 orders. The other three activities employresources that are acquired as used and needed. At the end of 20x2,the following results were reported for the four activities:

Activity	Activity Driver	SQ	AQ	SP
Receiving	Receiving orders	12,000	12,000	$21
Assembly	Labor hours	125,000	128,000	15
Expediting	Orders expedited	0	5,000	50
Storing	Number of units	0	10,000	7

Required:

Prepare a trend report that shows the non-value-added costs foreach activity for 20x1 and 20x2 and the change in costs for the twoperiods. Enter all decreases as positive amounts and all increasesas negative amounts. i.e. if 20x1 was 150,000 and 20x2 was 250,000that would be an increase and would need to be entered as anegative amount. If an amount is zero, enter "0".

Cicleta Manufacturing
Trend Report: Non-Value-AddedCosts
For the Years 20x1 and 20x2
Activity	20x1	20x2	Change
Receiving	$	$	$
Assembly
Expediting
Storing
Total	$	$	$