Under what conditions would the activity capacity used be zero?
A) if the activity is value-added
B) if the activity is nonvalue-added
C) if the activity is discretionary
D) It would never be set at zero.

Question

Quizplus · Accepted Answer

The activity capacity used would be zero if the activity is nonvalue-added. Nonvalue-added activities are those activities that do not add any value to the product or service and are considered wasteful. Therefore, it is possible to eliminate these activities and set their activity capacity used at zero. However, for value-added activities and discretionary activities, it would not make sense to set their activity capacity used at zero as they are necessary for the production process.

Under What Conditions Would the Activity Capacity Used Be Zero