Which of the following is a quality cost category associated with preventing defects?

• A. Overtime wages
• B. Prevention Costs (Conformance)
• C. Warranty costs
• D. Bad debt expenses

Answer: (B)

The idea here is about costs of quality, which are grouped into four types. The one that aims to stop defects before they happen is prevention costs, also known as conformance costs. These are investments made to build quality into the product or process—things like training staff, designing better processes, improving quality planning, supplier quality assurance, and preventive maintenance. Because they focus on preventing problems, they reduce the likelihood of defects arising later.

In contrast, other quality-related costs include appraisal costs (like inspection and testing to find defects), internal failure costs (scrap or rework before delivery), and external failure costs (warranty claims after the product is sold). Overtime wages can be part of normal labor costs and aren’t inherently about preventing defects, and warranty costs are external failures, not prevention.