COST ACCOUNTING
ACTIVITY BASED MANAGEMENT
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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rework time
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transfer time
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number of inspections
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processing time
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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adhering to government regulations, ensuring that industry standards are kept, and having to currently use outdated machinery.