The Most Effective Way to Minimize Quality Costs While Maintaining

question 70

True/False

The most effective way to minimize quality costs while maintaining high quality is to avoid having quality problems in the first place. This is the reason for incurring appraisal costs.

---

Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to individual units of product based on a specific costing activity.

Direct Materials Cost

Direct materials cost refers to the expenditure associated with the raw materials used directly in manufacturing a product.

Direct Materials

Materials that are directly used in the manufacture of end products.

Direct Labor

Wages paid to employees who are directly involved in the production of goods or services.