Quality Costs for Services Include

question 120

Multiple Choice

Quality costs for services include:

• A) Prevention costs and appraisal costs only.
• B) Prevention costs, appraisal costs and internal failure costs only.
• C) Appraisal costs and internal failure costs only.
• D) Prevention costs, appraisal costs, internal failure costs, and external failure costs.
• E) External failure costs only.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, indicating how much contributes to covering fixed costs.

Total Gross Margin

This is the difference between sales revenue and the cost of goods sold, before deducting administrative and selling expenses.

Absorption Costing

An accounting method that includes both variable and fixed production costs in the cost of goods sold.

Total Gross Margin

A financial metric that measures the difference between revenue and the cost of goods sold, indicating the profitability of sales before deducting operating expenses.