Question

Which of the following is an example of a value-added cost to a manufactured product?

A. the cost of storing inventory

B. the cost of handling inventory

C. the depreciation expense of robots that assemble the product

D. changing the setup of production-line operations

Answer 1

Answer-

The correct Option is A. the cost of storing inventory.

The value-added costs are the raw materials, direct labor, equipment and machinery expenses used in creating product, costs of holding goods in work in process and storing finished goods.

The Options B,C and D are incorrect.

The cost of handling inventory, depreciation expense of robots that assemble the product, changing the setup of production-line operations are not examples of value -added cost to a manufactured product.