A Machined Part Is Returned to the Drilling Department for Rework.The

question 66

Multiple Choice

A machined part is returned to the drilling department for rework.The additional labor that is used to correct the quality problem with the part is:

• A)a prevention cost.
• B)an appraisal cost.
• C)an internal failure cost.
• D)an external failure cost.

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Definitions:

Demand Note

A short-term loan that must be repaid (both principal and interest) in a lump sum at maturity.

Compounding

The process where the value of an investment increases because the earnings on an investment, both capital gains and interest, earn interest as time passes.

Demand Note

A loan or debt instrument that is repayable on demand at the choice of the lender at any time.

Lump Sum

A single payment made at a particular time, as opposed to multiple payments over time.