Which of the following non-value-added costs associated with manufactured work in process inventory is most significant?
A. The cost of materials that cannot be traced to any individual product.
B. The cost of labor that cannot be traced to any individual product.
C. The cost of moving, handling, and storing any individual product.
D. The cost of additional resources consumed to produce any individual product.
Answer:C
C is corrent because the cost of moving, handling, and storing products is a nonvalue-added cost and should be minimized.
A is incorrect because costs that cannot be traced to individual products are not necessarily nonvalue-added.
A is incorrect because costs that cannot be traced to individual products are not necessarily nonvalue-added.
D is incorrect because this is the definition of marginal cost of production.