A product currently requires 6 moves.By changing the plant layout, the number of moves can be reduced to 2.The cost per move is $40.Calculate the reduction in the nonvalue-added cost of the moving activity.
A) $7
B) $30
C) $0
D) $160
E) $150

Question

Quizplus · Accepted Answer

Reduction in nonvalue-added cost of moving activity = (Number of moves prior to change in plant layout - Number of moves after change in plant layout) × Cost per move
(6 moves - 2 moves ) × $40 = $160

A Product Currently Requires 6 Moves