Assume that a company spends $15,000 a year for inspecting, $45,000 for purchasing, and $26,000 for reworking products.A good estimate of nonvalue-added costs would be:
A) $60,000.
B) $41,000.
C) $71,000.
D) $45,000.
E) $26,000.

Question

Quizplus · Accepted Answer

Inspecting and reworking are generally nonvalue-added activities.
Therefore, a good estimate of nonvalue-added costs would be:
$15,000 + $26,000 = $41,000.

Assume That a Company Spends $15,000 a Year for Inspecting