Costs incurred in detecting which of the individual units do not conform to specifications are called
A)correction costs.
B)external failure costs.
C)internal failure costs.
D)prevention costs.
E)appraisal costs.

Question

Quizplus · Accepted Answer

Costs incurred in detecting nonconforming units are called appraisal costs. Option E is the correct answer. Correction costs are costs incurred to fix nonconforming units that are detected before shipment. Prevention costs are costs incurred to prevent defects from occurring in the first place. External failure costs are costs incurred when nonconforming products are shipped to customers, and internal failure costs are costs incurred when defects are detected during production.

Costs Incurred in Detecting Which of the Individual Units Do