What are Value-added activities and Non-value-added activities

Value-added activities (VA): The value-added activities are those activities which are necessary for the performance of the process. Such activities represents work that is valued by the external or internal customer. The customers are usually willing to pay (in some way) for the service. For example polishing a furniture by a manufacturer dealing in furniture is value added activity.

Non-value-added activities (NVA) : The NVA activity represents work that is not valued by the external or internal customer. NVA activities do not improve the quality or function of a product or service, but they can adversely affect costs and prices. Non-value added activities create waste, result in delay of some sort, add costs to the products or services and for which the customer is not willing to pay. Moving materials and machine set up for a production run are examples of NVA activities.

Disclaimer: This site is mainly dedicated for Students of CA, ACCA, CIMA, CMA, CGA, CPA, CFA, BBA, MBA and related students of other colleges and universities in Accounting, Management Accounting and Cost Accounting , Students of Higher Education in Accounting, Admission in Accounting Schools, Scholarship  in Accounting, Students of MBA, University admission information, College of Accounting, Accounting Notes, Accounting Training, Accounting Tuition,  Accounting Study Guidelines, Management Accounting
Share This
Previous Post
Next Post