The costs that are incurred to find manufactured products, which does not meet specifications are called ____________?
Correct answer: B. appraisal costs
- A. prevention costs
- B. appraisal costs
- C. external failure costs
- D. internal failure costs
Explanation
Appraisal costs are incurred to inspect, test, and identify products that fail to meet specifications. Prevention costs avoid defects, while internal failure costs correct defects found before shipment.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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