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Non-Value Added Activities; Total Quality Program, Variable Cost & Contribution Margin

1. Non-value added activities are those that do not add to a product's desirability.
a. True
b. False

2. Target costing centers on new product and service development as opposed to managing the value chain for existing products.
a. True
b. False

3. In a total quality program, the costs of internal and external failures may be traded-off against the costs of prevention and appraisal.
a. True
b. False

4*. Variable costs which increase in total amount in direct proportion to increase in output represent a constant amount per unit of output.
a. True
b. False

5*. The contribution margin is the difference between total revenue and fixed costs.
a. True
b. False

Solution Preview

1. Non-value added activities are those that do not add to a product's
desirability.
a. True

2. Target costing centers on new product and service ...

$2.19