The costs that are incurred to prevent low quality goods production are classified as ___________?
Correct answer: A. costs of quality
- A. costs of quality
- B. costs of learning
- C. costs of reengineering
- D. costs of spoilage inventory
Explanation
Costs incurred to prevent defective or low-quality output belong to the quality-cost category, specifically prevention costs within that category. The other options concern learning, redesign or inventory spoilage rather than quality prevention.
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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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