Asked by vidya sagar on Jun 21, 2024
Verified
Lazy Linda Ltd manufactures small kitchen appliances. One of the non-value added activities identified by the production manager is 'reworking the electrical component in a toaster'. Which of the following is a likely root cause cost driver?
A) The number of products requiring rework.
B) The quality of the completed toaster.
C) The quality of the electrical wiring purchased from suppliers.
D) Idle labour hours.
Non-value Added Activities
Tasks or processes that do not add any direct value or benefit to the product or service from the perspective of the customer.
Electrical Component
A device that participates in an electrical circuit, serving a specific function such as resistors or capacitors.
Root Cause Cost Driver
The underlying factor or activity that fundamentally causes a cost to occur within a business.
- Recognizing non-value added activities and understanding root cause cost drivers in manufacturing processes.
Verified Answer
Learning Objectives
- Recognizing non-value added activities and understanding root cause cost drivers in manufacturing processes.
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