A company spends $50,000 a year for inspecting, $40,000 for purchasing, and $60,000 for reworking products. What would be the best estimate of non-value-added costs?
A) $50,000
B) $60,000
C) $110,000
D) $150,000

Question

Quizplus · Accepted Answer

Non-value-added costs are costs that do not contribute to the value of the final product or service. In this given scenario, the costs of inspecting, purchasing, and reworking products do not add value to the product or service. Therefore, the best estimate of non-value-added costs would be the sum of these costs, which is $50,000 + $40,000 + $60,000 = $110,000. Therefore, the correct choice is (C).

A Company Spends $50,000 a Year for Inspecting, $40,000 for Purchasing