Which of the Following Would Be Classified as a Prevention

question 32

Multiple Choice

Which of the following would be classified as a prevention cost on a quality cost report?

• A)Lost sales arising from a reputation for poor quality.
• B)Final product testing and inspection.
• C)Net cost of spoilage.
• D)Quality data gathering,analysis,and reporting.

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Definitions:

Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and no tendency for change.

Call

An options contract that gives the investor the right, but not the obligation, to buy a stock, bond, commodity, or other instrument at a specified price within a specific time period.

Put

A financial derivative option that gives the holder the right, but not the obligation, to sell a security at a specified price within a specified time.

Black-Scholes Option

A mathematical model used to calculate the theoretical price of European put and call options, not accounting for dividends.