The cost of installing improved production equipment and production processes is a(n)________ cost.
A)external failure
B)internal failure
C)appraisal
D)prevention

Question

Quizplus · Accepted Answer

The cost of installing improved production equipment and production processes is a prevention cost. Prevention costs are costs incurred to prevent defects from occurring in the first place, and they include costs such as quality planning, process improvements, and training. By installing improved production equipment and production processes, a company is taking proactive steps to prevent defects and improve product quality, making this a prevention cost.

The Cost of Installing Improved Production Equipment and Production Processes