The prevention cost for Beta Company can be calculated by adding up the costs of prototype inspection, quality circles, design changes, and field testing.
Total prevention cost = Prototype inspection + Quality circles + Design changes + Field testing
= $132,000 + $75,000 + $45,000 + $60,000
= $312,000
Therefore, Beta's prevention cost for the year is $312,000.
The correct answer is not provided in the options given.
Beta Company had total sales of $2,900,000 for the fiscal year ending on December 31, 20X1. The company's costs of quality are as follows: Prototype inspection $132,000 Quality circles 75,000 Design changes 45,000 Product liability 35,000 Field testing 60,000 Calculate Beta's prevention cost for the year.
a.$207,000
b.$120,000
c.$80,000
d.$140,000
1 answer