CAPM (Certified Associate in Project Management) Practice Exam

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Which of the following is an example of prevention costs?

  1. Costs due to firing underperforming staff

  2. Costs due to legal settlements

  3. Costs due to an increase number of training days

  4. Costs due to end-of-year discounts

The correct answer is: Costs due to an increase number of training days

Prevention costs are expenses incurred to prevent or avoid quality problems. In this context, costs due to an increase in the number of training days represent prevention costs as training can enhance employee skills, reduce errors, and ultimately prevent quality issues from arising. On the other hand, firing underperforming staff, legal settlements, and end-of-year discounts do not fall under prevention costs but may be categorized as other types of costs such as appraisal costs, failure costs, or external failure costs respectively.

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