ECONOMICS

COST ACCOUNTING

ACTIVITY BASED MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Below are not drivers of value added activities, except ____
A
rework time
B
transfer time
C
number of inspections
D
processing time
Explanation: 

Detailed explanation-1: -Inspection is a non-value-added activity.

Detailed explanation-2: -The correct option is (D) Building maintenance.

Detailed explanation-3: -Value added time is the time spent that improves the outcome of a process. This is typically just the processing time associated with production. All of the other intervals associated with a process, such as wait time and queue time, contribute nothing to the outcome and so are considered non-value added time.

Detailed explanation-4: -Some examples of necessary non-value-adding activities in your business would be meeting customer specifications, adhering to government regulations, ensuring that industry standards are kept, and having to currently use outdated machinery.

There is 1 question to complete.