A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7.5 hours to produce. labour is £18 per hour. The nonvalue-added costs are
A) £27.
B) £54.
C) £81.
D) £0.

Question

Quizplus · Accepted Answer

Nonvalue-added costs are those costs that are incurred but do not add to the value of the product. In this case, the nonvalue-added time is 7.5 hours (current production time) - 3 hours (should-be production time) = 4.5 hours. At £18 per hour, the nonvalue-added costs are 4.5 hours * £18/hour = £81.

A Time-And-Motion Study Revealed That It Should Take 3 Hours