If Goods Are Inspected and Found to Be Defective,any Rework

question 39

Multiple Choice

If goods are inspected and found to be defective,any rework costs related to these units before the units are transferred to the finished-goods warehouse would be classified as a(n) :

• A)external failure cost.
• B)internal failure cost.
• C)production inefficiency cost.
• D)prevention cost.
• E)appraisal cost.

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Definitions:

Output

Output is the total amount of goods or services produced by a person, machine, business, or country.

Average Costs

Average costs refer to the total cost of production divided by the number of units produced, indicating the cost of producing each unit.

Marginal Costs

The cost added by producing one additional unit of a product or service.

Diseconomies of Scale

The phenomenon where production costs per unit increase as the scale of operation expands.