A time-and-motion study revealed that it should take 2 hours to produce a product that currently takes 6 hours to produce.Labor is $8 per hour. The value-added costs are
A) $16.
B) $32.
C) $48.
D) $-0-.

Question

Quizplus · Accepted Answer

Value-added costs are the costs that are necessary to produce a product. In this case, the time-and-motion study suggests it should take 2 hours to produce the product. Therefore, the value-added labor cost is 2 hours x $8 per hour = $16.

A Time-And-Motion Study Revealed That It Should Take 2 Hours