Which of the following statements about quality costs is true?
A) Even in theory, external failure costs can never be reduced to zero.
B) The less a company spends on prevention costs, the less they will have to spend on internal failure costs in the future.
C) If a company produces and sells a defective product, external failure costs are likely to exceed all the other types of quality costs.
D) A low level of internal failure costs usually indicates that more attention needs to be paid to prevention and appraisal costs.

Question

Quizplus · Accepted Answer

External failure costs, such as warranty and liability claims, can be very costly for a company if they produce and sell a defective product. These costs may include legal expenses, returned goods, and damaged reputation. Thus, external failure costs are likely to exceed all the other types of quality costs if a company produces and sells a defective product.

Which of the Following Statements About Quality Costs Is True