An example of an internal failure cost would be:

Question

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Scrap is an example of internal failure cost, as it refers to the cost of defective products or materials that must be thrown away or repurposed due to internal defects. This cost is incurred within the organization and is not visible to external customers. Product recalls (A) and process or product design (D) are examples of external failure costs, as they occur after the product has been delivered to the customer. Adjusting test equipment (B) is an example of prevention cost, as it involves making sure that the testing process is set up correctly to prevent defects from occurring in the first place.

An Example of an Internal Failure Cost Would Be