For Each Activity,determine the Amount of Value-Added and Non-Value-Added Costs

question 55

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.

---

Definitions:

Culturally Biased

Refers to a tendency to interpret or judge phenomena by standards inherent to one's own culture.

Group IQ Differences

The study of variations in average intelligence quotient (IQ) scores observed between different demographic or social groups.

Dr. Samuel George Morton

A 19th century physician and scientist known for his work in craniometry, often controversially associated with early theories of scientific racism.

Colonization

The process of establishing control over a foreign land and its people for the purpose of economic gain, cultural assimilation, or territorial expansion.