The Role of Quality in Limiting a Firm's Product Liability

question 86

Multiple Choice

The role of quality in limiting a firm's product liability is illustrated by all of the following except

• A) ensuring that contaminated products such as impure foods do not reach customers.
• B) ensuring that products meet standards such as those of the Consumer Product Safety Act.
• C) designing safe products to limit possible harm to consumers.
• D) using processes that make products as safe or as durable as their design specifications call for.
• E) making it easy for customers to complain about defective products.

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Definitions:

Plantwide Overhead Rate

This is a single overhead rate calculated by dividing all of a plant's manufacturing overhead costs by its total activity base, such as labor hours or machine hours, used across the entire factory.

Direct Labor-Hour

A unit of measure representing the labor time expended by workers directly involved in the manufacturing process, often used in cost accounting.

Activity-Based Costing

is a costing methodology that assigns overhead and indirect costs to specific products or services based on their consumption of resources.

Activity-Based Costing

An accounting method that assigns costs to products based on the activities performed for the product, providing more accurate cost information.