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Value added

CJECJE New MemberRegistered Posts: 9
Do you think value added will come up in the exam?:001_unsure:

Comments

  • SandyHoodSandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    I am not expecting it
    I might be wrong, but my 50p would be on Value Added not being tested in the context of Sales Revenue less Direct Materials and Components.

    Enhancement of Value such as value engineering related to achieving a target cost is a possible
    Sandy
    [email protected]
    www.sandyhood.com
  • pinkpink Feels At Home Registered Posts: 35
    Is value engineering something along the lines of designing a product at minimul costs, and before before finishing the product look to see if there is something that is not necessarily needed to reduce the cost?
    Hopefully that makes sense!
  • SandyHoodSandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    The sandpaper on only one side of a match box is one example.
    The costs were reduced without detracting from the value perceived by the customer.
    Sandy
    [email protected]
    www.sandyhood.com
  • pinkpink Feels At Home Registered Posts: 35
    Oh so you mean, it still does the same job but cost less to make it as it only has one sand papered side rather than two..
  • SandyHoodSandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    Yes
    Value Engineering links to target costing
    You start with an expected cost say of £15

    Then you hear the price will be £17 and the required profit is £7
    so value engineering is used to see if the expected cost can be brought down to £10 without losing the attributes that attract customers at £17.
    Sandy
    [email protected]
    www.sandyhood.com
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