In total quality management, which of the following is a prevention cost?
Answer and explanation
Correct answer: A. The cost of training operators in quality techniques
- Step 1: Prevention costs are incurred to stop defects occurring.
- Step 2: Training in quality techniques prevents defects.
- Step 3: Inspection is appraisal; scrapping and warranty repairs are internal and external failure costs.
Answer
The cost of training operators in quality techniques.
Why not the others: Inspection is an appraisal cost, since it detects defects after they happen. This is an external failure cost, as the defect reaches the customer. This is an internal failure cost.
Practise more Alternative cost accounting principles.
Free questions with an explanation for every one, and full timed ACCA Applied Knowledge (BT, MA, FA) mock tests.
More Alternative cost accounting principles questions
- A company has a pool of machine set-up costs of £60,000 per year. The cost driver is the number of set-ups, estimated at 200 for the year. P…
- A product will be sold at a target price of £50. The company wants a profit margin of 30% on selling price. What is the target cost?
- Which statement describes life cycle costing?
- Under throughput accounting, throughput is defined as: