A Nonvalue-Adding Activity Is Defined as A(n)

question 19

Multiple Choice

A nonvalue-adding activity is defined as a(n)

• A)administrative or support activity that adds overhead cost to the product and increases its market value.
• B)activity that adds cost to a product but does not increase its market value.
• C)activity that adds no cost to the product but increases its market value.
• D)wasteful but unavoidable production activity.

---

Definitions:

Equity Sales

The process of selling ownership interest in a company, typically in the form of stocks, to raise capital.

Equity Repurchases

The method through which a corporation repurchases its shares from the market, thus decreasing the total number of shares available.

Fixed Cost

Expenses that do not change in total regardless of the level of production or sales activity, such as rent, salaries, and insurance.

Raw Materials

Raw materials are the basic substances or components used in the manufacture or production of goods.