Value Analysis Takes Place

question 59

Multiple Choice

Value analysis takes place:

• A) when the product is selected and designed.
• B) during the initial stages of production when something needs to be done to assure product success.
• C) when the product is first conceived.
• D) during the production process when it is clear that the new product is a success.
• E) when the product cost is very low.

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Definitions:

Overhead Rate

A measure used to allocate indirect costs to produced goods, calculated by dividing total overheads by an allocation base like labor hours or machine hours.

Direct Labor Cost

The cost of labor directly involved in the production process, excluding indirect expenses like maintenance.

Predetermined Overhead Rate

This rate is used to allocate overhead costs to products or services based on a specific formula, often involving direct labor hours or direct material costs, aiding in the budgeting and costing process.

Direct Labor Costs

The wages and related benefits paid to employees who are directly involved in the production of goods or the provision of services.