Which of the Following Is Considered a Prevention Cost

question 18

Multiple Choice

Which of the following is considered a prevention cost?

• A) cost of troubleshooting
• B) laboratory acceptance testing
• C) warranty
• D) supplier quality assurance
• E) on-site performance tests

---

Definitions:

Overhead Rate

A calculation used to allocate overhead costs to produced goods or services, often based on direct labor hours or machine hours.

Direct Labor Cost

The wages and related expenses for workers who are directly involved in the production of goods or services.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products, calculated before the period begins based on estimated overhead costs and activity levels.

Direct Labor Costs

Expenses associated with the work directly performed on goods being produced, including wages paid to workers actually manufacturing a product.