Which of the Following Is True

question 24

Multiple Choice

Which of the following is true?

• A)Any activity that increases the cost of producing a product is a value-added activity.
• B)Engineering design is a non-value-added activity.
• C)Machining is a non-value-added activity.
• D)Not all activities labelled non-value-added are totally wasteful, nor can they be totally eliminated.

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Definitions:

Value-Based Pricing

A pricing strategy where prices are set primarily on the perceived value to the customer, rather than on the actual cost of production or historical prices.

Preventive Maintenance

Routine maintenance and inspections of equipment and facilities to prevent unexpected breakdowns and to ensure efficient operation.

Useful Life

The estimated duration of time over which an asset is expected to be usable by an organization, influencing depreciation calculations.

Economic Value

The assessment of value that a good or service offers to an economic entity.