Which of the Following Cost of Quality Categories Represent the Cost

question 229

Multiple Choice

Which of the following cost of quality categories represent the cost incurred to "re-inspect a reworked blender?"

• A)Prevention costs
• B)Internal failure costs
• C)Appraisal costs
• D)External failure costs

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Definitions:

Loss

The result of a company's expenditures surpassing its revenues, leading to financial detriment.

Fair Market Value

The price at which an asset would change hands between a willing buyer and seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

Commercial Substance

A transaction has commercial substance if it significantly changes the economic position or cash flows of the entity.

Future Cash Flows

The projected cash receipts and payments a company expects over a future period, essential for investment and financial planning.