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Classify as Value Adding or Non-Value Adding

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Identify the following activities performed on a manufactured product as value-adding (VA) or nonvalue-adding (NA).

1. Receiving

2. Storing raw materials

3. Moving materials

4. Working on product

5. Painting product

6. Packing and shipping

7. Engineering design of product

8. Storing finished goods

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Solution Summary

This solution helps with problems involving accounting standards. It helps identify various activities performed on a manufactured product as value-adding or nonvalue-adding. Concepts discussed include receiving, storing raw materials, moving materials, working on product, painting product, packing and shipping, engineering design of product and storing finished goods.

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1. Receiving : NA as it is just changing the location of the goods but not making it better in the eyes of the customer.

2. Storing raw materials : NA as it is just sitting in the location but not any better in the eyes of the customer.

3. Moving materials : NA as it is just changing the ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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