Question: Diligent Delivery Services is in the process of setting up an activity-based costing system. So far, the firm has traced its costs to several different

Diligent Delivery Services is in the process of setting up an activity-based costing system. So far, the firm has traced its costs to several different activities, including vehicle maintenance and actual package delivery. If Diligent is interested in cutting its costs, which of these two activities should it focus on reducing first?

a. Vehicle maintenance activities, because these are non-value-added.

b. Package delivery activities, because these are value-added.

c. Package delivery activities, because these are non-value-added.

d. Vehicle maintenance activities, because these are value-added.

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