Costs Incurred to Avoid Manufacturing Poor-Quality Goods or Services Are

question 136

Multiple Choice

Costs incurred to avoid manufacturing poor-quality goods or services are considered to be

• A)appraisal costs.
• B)activity-based costing.
• C)prevention costs.
• D)value engineering.

---

Definitions:

Purchase Account

An account used in accounting to record the total purchases of goods and services by a company.

Inventory Account

An account used to record the value of inventory held by a company, including raw materials, work-in-progress, and finished goods.

Cost of Goods Available

The total cost of goods a company has to sell during a specific period, calculated by adding the beginning inventory to the cost of goods purchased.

Purchase Returns

Refers to the process of returning goods previously bought to the supplier due to various reasons like defects or dissatisfaction.