A firm's warranty costs are $425,000 per year.A competitor's warranty costs are $155,000 per year.What are the non-value-added costs?

Question

Quizplus · Accepted Answer

Non-value-added costs are those that do not add value to the product or service from the customer's perspective. In this context, the entire $425,000 spent on warranty costs by the firm is considered non-value-added, as it represents costs incurred due to defects or issues that should ideally not occur.

A Firm's Warranty Costs Are $425,000 Per Year