In a Cost of Quality (COQ) report, sales returns and allowances due to quality deficiency would be classified as:
A) Prevention costs.
B) Salvage costs.
C) Appraisal costs.
D) Internal failure costs.
E) External failure costs.

Question

Quizplus · Accepted Answer

Sales returns and allowances due to quality deficiency are considered external failure costs because they occur after the product has been delivered to the customer and are a result of the product not meeting their expectations or requirements.

In a Cost of Quality (COQ) Report, Sales Returns and Allowances