The following are the expected quality costs for a firm for a selected period.Calculate the amount of prevention costs.
A) $32 000
B) $29 000
C) $31 000
D) $33 000

Question

The following are the expected quality costs for a firm for a selected period.Calculate the amount of prevention costs. 
A) $32 000 
B) $29 000 
C) $31 000 
D) $33 000

Quizplus · Accepted Answer

Prevention costs are the costs incurred to prevent defects from occurring in the first place. In this case, the prevention costs can be calculated by subtracting the total of appraisal costs and internal failure costs from the total quality costs.

Prevention Costs = Total Quality Costs - Appraisal Costs - Internal Failure Costs
= $65 000 - $20 000 - $14 000
= $31 000

Therefore, the correct answer is C.

The Following Are the Expected Quality Costs for a Firm