Which term listed below describes costs incurred when the company fails to detect poor quality goods or services before delivery to the customer?
A)Internal failure costs
B)Value-added activity
C)External failure costs
D)Just-in-time production

Question

Quizplus · Accepted Answer

External failure costs are incurred when poor quality goods or services are detected after they have been delivered to the customer. These costs can include warranties, repairs, returns or lost business due to customer dissatisfaction. Internal failure costs, on the other hand, are incurred when poor quality is detected before delivery, and can include rework, scrap or additional inspection costs. Value-added activity and just-in-time production are not related to costs incurred due to poor quality.

Which Term Listed Below Describes Costs Incurred When the Company