Nonvalue-Adding Activity Costs Do Not Increase a Product's Cost Because

question 2

True/False

Nonvalue-adding activity costs do not increase a product's cost because they do not add value to the product.

---

Definitions:

Accounting Principles

Fundamental concepts or guidelines that govern the field of accounting, such as consistency, relevance, reliability, and comparability.

Actual Cost

The direct costs incurred in the production of goods, including labor and materials.

Revenue Recognition Principle

An accounting principle that dictates that revenue should be recognized in the accounting period in which it is earned and realizable.

Recognized

Recognized, in accounting terms, refers to the official acknowledgment of a transaction or event in the financial statements through recording it.