For Each Following Activity, Determine the Amount of Value-Added and Nonvalue-Added

question 104

Essay

For each following activity, determine the amount of value-added and nonvalue-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.

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Definitions:

Martin Luther

A seminal figure in the Protestant Reformation, known for his criticisms of the Roman Catholic Church and the posting of his 95 Theses in 1517.

Act of Supremacy

The 1534 legislation passed by the English Parliament that recognized Henry VIII as the Supreme Head of the Church of England, marking the start of the English Reformation.

1534

A year notable for events like the enactment of the Act of Supremacy, which established King Henry VIII as the head of the Church of England.

Church of England

The primary state church of England, established in the 16th century by King Henry VIII's separation from the Roman Catholic Church.