- What Will Be the Total Prevention Cost Appearing on based

question 4

Multiple Choice

$\begin{array}{l}\text { Fabri Company's quality cost report is to be based on the following data: }\\\begin{array} { | l | r | } \hline \text { Liability arising from defective products } & \$ 56,000 \\\hline \text { Lost sales due to poor quality } & \$ 51,000 \\\hline \text { Test and inspection of in-process goods } & \$ 47,000 \\\hline \text { Quality circles } & \$ 17,000 \\\hline \text { Net cost of spoilage } & \$ 93,000 \\\hline \text { Debugging software errors } & \$ 29,000 \\\hline \text { Rework labour and overhead } & \$ 95,000 \\\hline \text { Final product testing and inspection } & \$ 32,000 \\\hline \text { Statistical process control activities } & \$ 61,000 \\\hline\end{array}\end{array}$
- What will be the total prevention cost appearing on the quality cost report?

• A) $64,000.
• B) $73,000.
• C) $78,000.
• D) $93,000.

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Definitions:

Accrued Salaries

Salaries that have been earned but not yet paid out to employees.

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.

Accounts Receivable

Funds that customers have yet to pay to a business for the goods or services that have already been provided to them.

Accumulated Depreciation

The total depreciation of an asset up to a single point in time, reflecting its decreased value from wear and tear or obsolescence.