ACCA Applied Knowledge · Business and Technology · The relationship between accounting and other business functions
A quality manager introduces a total quality management (TQM) programme aimed at getting production right first time. How would the accounting function most likely classify the cost of inspecting finished goods before dispatch?
Inspecting finished goods before dispatch is an appraisal cost, because it is incurred to detect defects rather than to prevent them or to correct them. Prevention costs stop defects arising, while failure costs arise once defective output has been found.
- APrevention cost
- BAppraisal costCorrect
- CInternal failure cost
- DExternal failure cost
Explanation
Appraisal costs are incurred to detect defects, such as inspection and testing. Prevention costs aim to stop defects occurring, like training or design improvement. Failure costs arise when defects are found internally or externally, so inspection before dispatch is appraisal.
Did you get it right without looking?
One question tells you little. A timed set on The relationship between accounting and other business functions shows your real accuracy, how long you take and where you lose marks.
More The relationship between accounting and other business functions questions
- An employee's gross monthly pay is $3,000. Income tax deducted is $450, employee pension contributions are $150, and the employer's social s…
- Which of the following is an example of the sales function relying on information from the accounting function?
- A business uses a customer relationship management (CRM) system that records each customer's purchases, complaints and payment history. Whic…
- Which of the following best distinguishes management accounting from financial accounting within the finance function?
- Which of the following is an example of inbound logistics in a manufacturing business?
- Which of the following is an example of the accounting function relying on the IT function to provide a management information benefit?