Many years ago, Honda Motor Car Company designed an automatic transmission that could only be assembled and installed in a vehicle in one way. Any departures from the design would prevent a worker from completing installation. This design led to a zero initial failure rate for the transmission. The investments in engineering costs to design this transmission best illustrate:
A) Prevention cost.
B) Detection cost.
C) Internal failure cost.
D) External failure cost.

Question

Quizplus · Accepted Answer

Prevention costs are expenses incurred to prevent defects in products or services. Honda's investment in designing a transmission that could only be assembled one way to ensure a zero initial failure rate is an example of a prevention cost, as it aims to eliminate defects before they occur.

Many Years Ago, Honda Motor Car Company Designed an Automatic