Asked by vidya sagar on Jun 21, 2024

verifed

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.
verifed

Verified Answer

HF
Hussain Farouq AlawadhiJun 21, 2024
Final Answer :
C
Explanation :
The root cause cost driver for reworking the electrical component in a toaster is likely the quality of the electrical wiring purchased from suppliers. If the wiring purchased is of poor quality, it may result in the electrical components of the toaster failing and needing to be reworked. The other options, such as the number of products requiring rework, the quality of the completed toaster, and idle labour hours, may be contributing factors but are not the primary root cause.