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

Question

Quizplus · Accepted Answer

The nonvalue-added costs are the costs incurred in the production process that do not directly contribute to the value of the product. In this case, the time-and-motion study revealed that the production process can be improved to reduce the time required to produce the product. As a result, the current production process is generating £32 of nonvalue-added costs (£8 per hour x 4 additional hours required to produce the product). Therefore, the best choice is B.

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