- What Will Be the Total Prevention Cost Appearing on based

question 202

Multiple Choice

$\begin{array}{l}\text { Eade Company's quality cost report is to be based on the following data: }\\\begin{array} { | l | r | } \hline \text { Systems development } & \$ 32,000 \\\hline \text { Final product testing and inspection } & \$ 13,000 \\\hline \text { Quality data gathering, analysis, and reporting } & \$ 11,000 \\\hline \text { Net cost of scrap } & \$ 62,000 \\\hline \text { Returns arising from quality problems } & \$ 59,000 \\\hline \text { Amortization of test equipment } & \$ 57,000 \\\hline \text { Rework labour and overhead } & \$ 18,000 \\\hline \text { Test and inspection of incoming materials } & \$ 40,000 \\\hline \text { Product recalls } & \$ 36,000 \\\hline\end{array}\end{array}$
- What will be the total prevention cost appearing on the quality cost report?

• A) $43,000.
• B) $45,000.
• C) $47,000.
• D) $51,000.

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Definitions:

Long-Term Payout Ratio

The proportion of earnings paid out as dividends to shareholders over an extended period, often used as a measure of a company's dividend policy stability.

Dividend Policy

The approach a firm employs to determine the amount of dividends it will distribute to its shareholders.

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used as an indicator of investment value.

Market Price

The price at which an asset or service is currently traded in the market.