Tharp and Kostrivas is a law firm that is initiating an activity-based costing system. Ben Tharp, 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. Classify each of the activities listed by Ben Tharp as value-added or non-value-added and defend your classification. How much was value-added and how much was non-value-added?
- Activities Hours
- Writing contracts and letters 1.0
- 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 course 2.5
- Entertaining a prospective client 2.0