Revenues $701,250 390,000 Salaries of professional staff (7,500 hours × $52 per hour) Travel 15,000 Administrative and support costs 171,600 Total costs 576,600 Operating income $124,650 The percentage of time spent by professional staff on various activities follows: Making calculations and preparing drawings for clients Checking calculations and drawings Correcting errors found in drawings (not billed to clients) Making changes in response to client requests (billed to clients) Correcting own errors regarding building codes (not billed to clients) 77% 3 8 5 Total 100% Assume administrative and support costs vary with professional-labor costs. Consider each requirement independently. Required 1. How much of the total costs in 2017 are value-added, non-value-added, or in the gray area between? Explain your answers briefly. What actions can Calvert take to reduce its costs? 2. What are the consequences of misclassifying a non-value-added cost as a value-added cost? When in doubt, would you classify a cost as a value-added or non-value-added cost? Explain briefly. 3. Suppose Calvert could eliminate all errors so that it did not need to spend any time making corrections and, as a result, could proportionately reduce professional-labor costs. Calculate Calverť's operating income for 2017. 4. Now suppose Calvert could take on as much business as it could complete, but it could not add more professional staff. Assume Calvert could eliminate all errors so that it does not need to spend any time correcting errors. Assume Calvert could use the time saved to increase revenues proportionately. Assume travel costs will remain at $15,000. Calculate Calvert's operating income for 2017.

An example of a staff management function would be A. determining that new equipment is required. B. managing production. C. preparing operating cost estimates for proposed new equipment. D. ensuring that environmental standards are met. E. being responsible for attaining a set level of plant income.

For each cost, indicate whether it would most likely be classified as direct materials, direct labor, manufacturing overhead, or selling and administrative. (a) Amortization of patents on factory machine (b) Components used to make product A (Select one) (Select one) (Select one) (c) Direct materials used (d) Factory utilities (e) Property taxes - factory. (f) The cost of a hard-drive installed in a computer for a computer assembling company (g) The wages of employees who assemble computers from components (h) The wages of the company's accountant (i) Wages of the product tester () Wages to assembly line A workers (Select one) (Select one) (Select one) (Select one) (Select one) (Select one) (Select one)

Which one of the following options can be used when allocating cafeteria costs? Select one: a. Number of square feet b. Appraised value of square footage c. Number of direct labor hours d. Number of employees

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Nn.103. Subject  :- Account