Classification of activities and products

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Reference no: EM13827969

Terracotta Ltd - Newly introduced products under review

Coal Flyash - Coal flyash bricks are made from coal-burning waste. These bricks reduce raw material cost for Terracotta Ltd and reduce waste disposal costs for power plants. The bricks are designed to have better color, physical consistency, weight, compressive strength and thermal conductivity than standard bricks.

Colourbrix - Colourbrix has a range of new and vibrant colors. They do not need to be rendered or painted because the color is infused into the brick. Colourbrix pricing strategy:

Sales price per unit (1000 bricks) $5750

Expected variable costs per unit $3120

Fixed overhead costs to be allocated $2700,000

Estimated unit sales in the first year 4000 units

Desired profit margin 40 percent

Which of the following activities of the clay products division of Terracotta Ltd are correctly classified?

Value adding Non-value adding

A. Clay extraction Storage/delivery

B. Shaping Warranty costs/returns

C. Mixing Manufacturing overheads

D. Drying/cooling Non-manufacturing overheads

Additional Requirement

This multiple choice question based on the Corporate Strategy and it discusses about the clay products division being correctly classified.

Reference no: EM13827969

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