A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7.5 hours to produce.Labour is $18 per hour.What are the non-value-added costs?
A)$81
B)$54
C)$27
D)$18

Question

Quizplus · Accepted Answer

Non-value-added costs are the costs associated with activities that do not add value to the product. In this case, it's the cost of the extra time (4.5 hours) it currently takes to produce the product beyond the ideal time (3 hours). The calculation is 4.5 hours * $18/hour = $81.

A Time-And-Motion Study Revealed That It Should Take 3 Hours