Which of the following terms best describes costs incurred to avoid poor quality goods or services?
A)Appraisal costs
B)Activity-based costing
C)Value engineering
D)Prevention costs

Question

Quizplus · Accepted Answer

Prevention costs are incurred to prevent defects from occurring in the first place. This includes costs related to training, planning, documentation, and quality system management. These costs are aimed at avoiding poor quality goods or services and reducing the need for appraisal costs, which are incurred to detect defects after they have occurred. Activity-based costing is a method of assigning costs to products or services based on the activities involved, and value engineering is a design and analysis method aimed at improving the value of a product or service by optimizing the cost-benefit ratio. These terms are not directly related to costs incurred to avoid poor quality.

Which of the Following Terms Best Describes Costs Incurred to Avoid