Items Consumed in One or a Few Uses, Such as Food

question 58

Multiple Choice

Items consumed in one or a few uses, such as food and fuel, are referred to as

• A)services.
• B)perishable goods.
• C)durable goods.
• D)nondurable goods.
• E)disposable goods.

Understand the process of allocating support department costs to production departments prior to product overhead allocation.

Understand the different types of costs in service organizations including upstream, downstream, and production costs.

Recognize the complexity of service costs across different service categories (professional services, service shops, and mass services).

Understand process costing applications and when it applies to service entities.

---

Definitions:

Appraisal Costs

Expenses associated with evaluating and inspecting products to ensure they meet quality and compliance standards.

Internal Failure Costs

Internal Failure Costs are expenses incurred when a product fails to meet quality standards before it is shipped to customers, including scrap, rework, and downtime.

External Failure Costs

Costs that arise when a product fails to meet quality standards after being delivered to the customer, including returns, repairs, and warranty claims.

Quality Cost Report

A document detailing the costs associated with ensuring the quality of products or services, including prevention, appraisal, and failure costs.