A firm's warranty costs are £125,000 per year. A competitor's warranty costs are £25,000 per year. The nonvalue-added costs are

Question

Quizplus · Accepted Answer

Nonvalue-added costs refer to costs incurred by a firm that do not add any value to the end product or service. In this case, the firm's warranty costs of £125,000 per year are nonvalue-added costs as they do not add any value to the end product. The competitor's warranty costs of £25,000 per year are also nonvalue-added costs. Therefore, the correct answer is A, which represents the nonvalue-added costs incurred by the firm.

A Firm's Warranty Costs Are £125,000 Per Year