MNL's accounting information system reported warranty repair and product replacement costs totalling $120,000 in a recent accounting period. These costs are an example of which type of quality costs?

Question

Quizplus · Accepted Answer

Warranty repair and product replacement costs are considered external failure costs because they occur after the product has been delivered to the customer and represent costs associated with failing to meet quality standards externally.

MNL's Accounting Information System Reported Warranty Repair and Product Replacement