Essay
For each activity,determine the amount of value-added and non-value-added costs.
a.The company keeps 7 days of materials inventory on hand to avoid shutdowns due to materials shortages.Carrying costs are $50,000 per day.
b.A time-and-motion study revealed that it should take 10 minutes to produce a product that now takes 50 minutes to produce.Labour is $18 per hour.
c.Warranty work costs the firm $500,000 per year.Warranty costs for the industry average $100,000 per year.
Correct Answer:
Verified
a.Value-added costs = $0
Non-value-adde...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
Non-value-adde...
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q50: What is the term for increasing the
Q51: Froelech Company has developed capacity standards.Information
Q52: Froelech Company has developed capacity standards.
Q53: What is the definition of unused capacity
Q54: Which of the following is a necessary
Q56: What is the term for those activities
Q57: Which of the following is a necessary
Q58: What is the term for decreasing the
Q59: What is the term for the process
Q60: A company keeps 20 days of materials