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Are the quality costs nd delivery costs costs of prodn dept ???
I have taken quality costs as costs of production dept nd cost of delivery as costs of selling dept !!!!Have I done right ??? Pls explain what exactly are costs in prodn dept which generally include According to me cost of producing product ( lab ,mat ,design etc
Hi
Quality costs is a very broad term -it includes prevention, appraisal and failure costs -so covers all different types of costs.
Many of these will occur in the production department – others will occur elsewhere.For example the cost of procurement of high quality items is a purchasing department cost.
The main idea is that everybody is responsible for quality in an organisation. Questions that ask about quality costs – are unlikely to require you to allocate them to a particular department ( more likely to ask you to categorise them into prevention. appraisal. internal and external failure costs).
I agree that delivery costs are part of selling and distribution expenses – as you have said.
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