The cost of maintaining testing equipment would be classified as a(n)
A) prevention cost.
B) appraisal cost.
C) internal failure cost.
D) external failure cost.

Question

Quizplus · Accepted Answer

The cost of maintaining testing equipment is a prevention cost because it is incurred to prevent defects or problems from occurring in the first place. Prevention costs are a type of quality cost that is associated with activities designed to prevent quality problems, such as training, inspection, and maintenance. Appraisal costs are incurred to determine whether products or services meet quality standards, such as testing, inspection, and auditing. Internal failure costs are incurred when defects or problems are detected before they reach the customer, such as rework, scrap, and downtime. External failure costs are incurred when defects or problems are detected by the customer, such as returns, repairs, and warranty claims.

The Cost of Maintaining Testing Equipment Would Be Classified as A(n)