Exercise 416 Lasso and Markowitz is a law firm that is initi

Exercise 4-16 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 Classify each of the activities listed by Sam Lasso as value-added or non-value added Activities Writing contracts and letters Attending staff meetings Taking depositions Doing unique research Traveling to/from court Contemplating legal strategy Eating lunch Litigating a case in court Entertaining a prospective client Hours 1.5 0.5 1.0 1.0 1.0 1.0 1.0 2.5 1.5 How much was value-added time? (Round answer to 1 decimal place, e.g. 2.1.) Value-added time hours How much was non-value-added time? (Round answer to 1 decimal place, e.g. 2.1.) Non-value-added hours

Solution

Activities

Hours

Writing contracts and letters

1.5

Value -added

Attending staff meetings

0.5

Non – value - added

Taking depositions

1.0

Value -added

Doing research

1.0

Non – value - added

Traveling to/from court

1.0

Non – value - added

Contemplating legal strategy

1.0

Value -added

Eating lunch

1.0

Non – value - added

Litigating a case in court

2.5

Value -added

Entertaining a prospective client

1.5

Non – value - added

Value – added time

6 Hours

Non - value – added time

5 Hours

Activities	Hours
Writing contracts and letters	1.5	Value -added
Attending staff meetings	0.5	Non – value - added
Taking depositions	1.0	Value -added
Doing research	1.0	Non – value - added
Traveling to/from court	1.0	Non – value - added
Contemplating legal strategy	1.0	Value -added
Eating lunch	1.0	Non – value - added
Litigating a case in court	2.5	Value -added
Entertaining a prospective client	1.5	Non – value - added