Final answer:
A non-value-added activity adds cost without increasing perceived value of a product and doesn't contribute to customer's value perception. Removing such activities helps in cost savings and improving business efficiency.
Step-by-step explanation:
An activity that adds costs to the product but does not increase its perceived value is known as a d) non-value-added activity. This term is used in cost accounting and lean manufacturing to describe any action that takes up resources but does not contribute to the end customer's perception of value. In contrast, a value-added activity enhances the product in a way that customers are willing to pay for.
The term cost driver refers to any activity that drives the cost of a product, which can be either value-added or non-value-added in nature. A cost/benefit activity implies an analysis where the costs of a decision are weighed against the benefits. Understanding the differentiation between these terms is essential for effective cost management and optimization in a business setting. Removing non-value-added activities can lead to cost savings and more streamlined processes, contributing to overall business efficiency.