1. Which of the following are examples of non-value-added activities?
a. Assembling a bicycle
b. Purchasing raw materials
c. Designing a new product
d. Reworking a defective product
2. A company is spending $70,000 per year for inspecting, $60,000 per year for purchasing, and $56,000 per year for reworking products. What is a good estimate of non-value-added costs?
a. $126,000
b. $70,000
c. $56,000
d. $130,000
3. Which of the following is likely to be used to reduce the cost of reworking products?
a. Activity sharing
b. Activity elimination
c. Activity reduction
d. Activity selection
4. Activity-based management includes both process value analysis and activity-based costing. Which of the following features is primarily associated with process value analysis?
a. Defining root causes of each activity
b. Identifying cost objects and activity drivers
c. Calculating activity rate
d. Assigning costs to cost objects