Supporting Expenses Are Not Included in the Numerator of the Program

question 54

True/False

Supporting expenses are not included in the numerator of the program expense ratio.

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Definitions:

Prevention Costs

Expenses incurred to prevent defects in products or services, including costs of quality planning, training, and preventive maintenance.

Appraisal Costs

The costs associated with measuring, evaluating, or auditing products to ensure they meet quality standards and performance requirements.

Quality Cost Report

A detailed analysis of the costs related to ensuring the quality of products or services, including prevention, appraisal, and failure costs.

Prevention Costs

Expenses incurred to avoid the production of defective products or the provision of faulty services.