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Pazer, Inc produces portable televisions. Pazer's product manager proposes to increase the cost structure by adding voice-activated volume/channel controls to the television, and also adding three additional repair personnel to deal with products returned due to defects, Are these costs value-added or nonvalue-added? Cost of Voice-Activated Controls Cost of Additional Repair Personnel
Suggested Answer: B
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The additional cost of the voice-activated controls as a value-added cost because it provides new unctionality for the consumer. The cost of additional repair personnel, on the other hand, is onvalue-added since it is incurred to address deficiencies in quality.
13 comments · newest first
MI
Mirta
11 months ago
Adding costs without clear benefits seems risky.
TR
Tresa
12 months ago
Wait, are we sure the extra repair staff is really necessary?
EM
Emilio
12 months ago
Totally agree, the voice feature is a game changer!
RE
Reta
12 months ago
Not sure about the repair personnel being value-added.
AG
Agustin
1 year ago
Voice-activated controls definitely add value!
WI
Wilda
1 year ago
I’m confused about the definitions. I thought any cost related to fixing defects was nonvalue-added, but maybe the voice controls are definitely value-added?
AS
Ashley
1 year ago
This question reminds me of a similar practice question we did on cost classification. I think both costs could be tricky to categorize, but I lean towards option B.
EV
Evangelina
1 year ago
I'm not entirely sure about the additional repair personnel. It feels like that cost could be seen as nonvalue-added since it's related to defects rather than improving the product.
TR
Tran
1 year ago
I remember discussing value-added vs. nonvalue-added costs in class, and I think the voice-activated controls might be considered value-added since they enhance the product.
LE
Leonardo
1 year ago
The Enhanced Dynamic Content Block seems like it might be the most robust solution here. It should give us the ability to loop through the product data and display it in the email.
NO
Nobuko
1 year ago
Program costs are always a concern, but I think the cultural and language needs of employees should take priority here.
TR
Truman
1 year ago
Hmm, I'm a bit confused about the distinction between spin-offs and carve-outs. I'll need to review those concepts again before attempting to answer this.
AN
Annice
1 year ago
I thought matching to sample was about picking between options rather than just naming. I think this is more about labeling.