.Johnson Products Company is in the process of adopting the just-in-time operating philosophy for its idol-making operations.Indicate which of the following overhead costs is a nonvalue-adding cost (NVA).
A)Machine electricity
B)Machine repairs
C)Depreciation of the machine used
D)Machine setup labor

Question

Quizplus · Accepted Answer

Depreciation of the machine used is a nonvalue-adding cost as it does not directly contribute to the production of the idols. The other overhead costs listed, such as machine electricity, machine repairs, and machine setup labor, are necessary costs for the production process and can be considered value-adding costs.

Johnson Products Company Is in the Process of Adopting the Just-In-Time