Asked by Emily Huber on Jun 13, 2024
Verified
Which of the following would be considered as a prevention cost
A) Rework costs.
B) Scrap costs.
C) Inspection of completed products prior to shipment to customers.
D) Supplier management.
Prevention Cost
Expenditures incurred to avoid defects in products or services, including costs associated with quality planning and assurance.
Rework Costs
Rework costs are expenses associated with fixing defective products or correcting service delivery errors to meet customer specifications or quality standards.
Scrap Costs
The costs associated with the disposal or recycling of materials that are not part of finished products.
- Distinguish between prevention and internal failure costs and their relevance in cost management.
Verified Answer
NL
Nachoo LerechJun 16, 2024
Final Answer :
D
Explanation :
Prevention costs are expenses incurred to avoid producing defective products. Supplier management is a prevention cost because it involves activities to ensure that materials and components meet quality standards before they are used in production, thereby preventing defects.
Learning Objectives
- Distinguish between prevention and internal failure costs and their relevance in cost management.