Which of the Following Is Not True About Quality Costs

question 13

Multiple Choice

Which of the following is not true about quality costs?

• A)Lost sales resulting from quality problems would be classified as external failure costs.
• B)If a company is doing a good job in prevention activities,appraisal costs should be minimal.
• C)It is generally less expensive if a defective good is shipped to a customer than if the defect is detected prior to shipment.
• D)Generally,if a company devotes resources to prevention,its appraisal,internal failure and external failure costs should decline.

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Definitions:

Risky Assets

Assets that carry a significant possibility of loss along with the potential for higher rewards.

Money Market Mutual Funds

Investment funds that pool investors' money to purchase short-term, high-quality debt securities, offering liquidity and earning interest.

Check-Writing Privileges

The ability granted to an individual to write checks against an account, such as a money market account, that typically doesn't offer this feature.

Bank Checking Accounts

Banking services that allow individuals and businesses to deposit money and withdraw funds, typically through issuing checks or electronic transfers.