2. The initial effect of emphasizing prevention and appraisal was to reduce
external failure costs and increase internal failure costs. The increase in
appraisal activities resulted in catching more defective units before they
were shipped to customers. As a consequence, rework and scrap costs
increased. In the future, an increased emphasis on prevention should
result in a decrease in internal failure costs. And as defect rates are re-
duced, resources devoted to appraisal can be reduced.
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