Question

Schedule of Activity Costs Quality Control Activities Activity Cost Process audits $50,100 Training of machine operators...

Schedule of Activity Costs
Quality Control Activities Activity Cost
Process audits $50,100
Training of machine operators 25,000
Processing returned products 15,100
Scrap processing (disposal) 24,400
Rework 7,300
Preventative maintenance 30,800
Product design 42,600
Warranty work 6,100
Finished goods inspection 22,800

From the above schedule of activity costs, determine the non-value-added costs.

a.$112,200

b.$52,900

c.$224,200

d.$46,800

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Answer #1

Based on the information available in the question, we can determine the non-value-added costs as follows:-

Quality Control activities Amount
Scrap processing (disposal)              24,400
Processing returned products              15,100
Rework                7,300
Warranty work                6,100
Non Value Added costs              52,900

Based on the above calculation, the correct answer is Option B - $52,900.

Option A, Option B and Option C are incorrect based on the above calculations.  

Please let me know if you have any questions via comments and all the best :)

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