Which of the following is not an example of an external failure cost?
A) Accepting company liability resulting from product failure.
B) Experiencing decreasing sales as a result of poor-quality products.
C) Repairing or replacing defective products after they've been sold.
D) Testing products in use at the customer's site.

Question

Quizplus · Accepted Answer

Testing products in use at the customer's site is a preventive measure and is considered an appraisal cost, not an external failure cost. External failure costs occur after the product has been delivered to the customer and include liabilities, decreased sales, and repairs or replacements.

Which of the Following Is Not an Example of an External