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 nonvalue- added?
|
Activities |
Hours |
|
Writing contracts and letters |
1.00 |
|
Attending staff meetings |
0.50 |
|
Taking depositions |
1.00 |
|
Doing research |
1.00 |
|
Traveling to/from court |
1.00 |
|
Contemplating legal strategy |
1.00 |
|
Eating lunch |
1.00 |
|
Litigating a case in course |
2.50 |
|
Entertaining a prospective client |
2.00 |