Which of the Following Is an Example of Value Added

question 58

Multiple Choice

Which of the following is an example of value added cost?

• A) cost of machine breakdown
• B) cost of defective products
• C) rework costs
• D) direct machining costs

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Definitions:

Direct Material

Raw materials that can be directly attributed to the production of specific goods or services, utilized in their creation.

Direct Labour Cost

A cost that can be directly attributed to the production of specific goods or services, such as wages paid to employees who physically produce a product.

Overhead Applied

The portion of indirect costs allocated to a specific product or department within a company, based on a predetermined overhead rate.

Cost of Goods Sold

The immediate expenses linked to the creation of products sold by a business, encompassing both materials and labor costs.