Which of the following would be classified as a prevention cost on a quality cost report?
A) Lost sales arising from a reputation for poor quality.
B) Final product testing and inspection.
C) Net cost of spoilage.
D) Quality data gathering, analysis, and reporting.

Question

Quizplus · Accepted Answer

Quality data gathering, analysis, and reporting is a prevention cost because it is a cost incurred to prevent defects or problems from occurring in the first place. It is aimed at identifying defects at an early stage and taking corrective actions to prevent them. Lost sales arising from a reputation for poor quality are an example of an external failure cost, final product testing and inspection is an example of an appraisal cost, and net cost of spoilage is an example of an internal failure cost.

Which of the Following Would Be Classified as a Prevention