From the following list of costs for a kitchen manufacturer,determine the amount of value-added cost.

Question

Quizplus · Accepted Answer

Value-added costs are costs incurred during the manufacturing process that increase the value of the final product. Based on the given list, the only costs that could be considered value-added are the direct materials cost ($110,000) and the direct labor cost ($88,000). The other costs, such as rent, utilities, and advertising, are not directly related to the manufacturing process and do not add value to the final product. Therefore, the total value-added cost is $198,000 (110,000 + 88,000), and B - $54,000 - is the closest option.

From the Following List of Costs for a Kitchen Manufacturer,determine