Concept explainers
Lasso and Markowitz is a law firm that is initiating an activity-based costing system. Sam Lasso, the senior partner and strong supporter of ABC, has prepared the following list of activities performed by a typical attorney in a day at the firm.
Activities | Hours |
Writing contracts and letters | 1.5 |
Attending staff meetings | 0.5 |
Taking depositions | 1.0 |
Doing research | 1.0 |
Traveling to/from court | 1.0 |
Contemplating legal strategy | 1.0 |
Eating lunch | 1.0 |
Litigating a case in court | 2.5 |
Entertaining a prospective client | 1.5 |
Instructions
Classify each of the activities listed by Sam Lasso as value-added or non-value-added, and defend your classification. How much was value-added time and how much was non-value-added?
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Managerial Accounting: Tools for Business Decision Making
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