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Non-Value-Added Costs Occur in Non-Manufacturing Organizations as Well as in Manufacturing

question 46

Essay

Non-value-added costs occur in non-manufacturing organizations as well as in manufacturing firms.
Required:
A. Explain what is meant by a non-value-added cost.
B. Identify two potential non-value-added costs for each of the following service providers: airlines, banks, and hotels.


Definitions:

Gains From Trade

The benefits that parties obtain from voluntary trade, where each party can secure goods or services they value more highly than those they trade away.

Knits Sweaters

The craft or process of making sweaters by interlocking loops of yarn with knitting needles.

Hamburgers

A popular sandwich consisting of one or more cooked patties of ground meat, usually beef, placed inside a sliced bread roll or bun.

Skills

The abilities and expertise that individuals possess, which enable them to perform tasks effectively.

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