Which of the following would be classified as an external failure cost on a quality cost report?
A) Amortization of test equipment.
B) Test and inspection of in-process goods.
C) Test and inspection of incoming materials.
D) Warranty repairs and replacements.

Question

Quizplus · Accepted Answer

Warranty repairs and replacements are considered external failure costs because they occur after the product has been shipped to and used by the customer. The other options are either prevention costs (amortization of test equipment) or appraisal costs (test and inspection of in-process goods and incoming materials).

Which of the Following Would Be Classified as an External