NONVALUE-ADDED COSTS
Dykes, Inc. has the following two activities: (1) Retesting reworked products, cost: $160,000. The retesting cost of the most efficient competitor is $50,000. (2) Welding subassemblies, cost: $300,000 (15,000 welding hours). A benchmarking study reveals that the most efficient level for Dykes would use 12,000 welding hours and entail a cost of $180,000.
Determine the nonvalue-added cost of each activity.