Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

تمرين 39

The three activities described below were part of the production process in November at Foundry Bellows. Inc. Describe how each activity creates additional costs and whether it is value-added or non-value-added. If it is non-value-added, identify the associated cost of quality category.
a. The Purchasing Department acquired cheaper materials at a big discount but, in order to get the discount, it had to accept delivery of a six-month supply.
b. When materials were issued to production, they were found to be of low quality and products required extensive rework. As a result, overtime pay was required for 50 employees.
c. The production schedule fell behind because of the additional rework. To meet the production schedule for November, workers were transferred from inspection to direct labor and inspection activities were curtailed.