Those Activities That Consume Resources but Do Not Contribute to the Value

question 52

Multiple Choice

Those activities that consume resources but do not contribute to the value of the product are referred as

• A)contribution activities.
• B)non-value-added activities.
• C)manufacturing overhead.
• D)period costs.

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Definitions:

Net Operating Income

The income yielded by a company's primary activities, not including costs or earnings from activities outside its main operations.

Variable Costing

A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in product cost.

Operating Results

The outcome of a company's core business activities, including revenue generation and expenses, over a specific period.

Fixed Cost

Costs that do not vary with the level of production or sales, remaining constant within a specific range of activity.