Which of the following activities are value-added activities?
i. Preventive maintenance
ii. Repairs to machinery
iii. Move work-in-process inventory between machines
iv. Process receivables
A) i and ii
B) iii and iv
C) i and iv
D) ii and iv

Question

Quizplus · Accepted Answer

Value-added activities are those that increase the worth of a product or service to a customer. Preventive maintenance ensures machinery operates efficiently, directly impacting product quality and production efficiency, thus adding value. Processing receivables is crucial for cash flow and directly impacts a company's financial health, making it a value-added activity. Repairs to machinery and moving work-in-process inventory, on the other hand, are necessary but do not directly add value to the product from the customer's perspective.

Which of the Following Activities Are Value-Added Activities