For Cost of Quality (COQ) reporting purposes, materials inspection costs would normally be classified as:
A) Salvage costs.
B) Retention costs.
C) Appraisal costs.
D) Internal failure costs.
E) External failure costs.

Question

Quizplus · Accepted Answer

Materials inspection costs fall under the category of appraisal costs, which include the cost of any activities intended to detect quality problems, such as inspection, testing, and auditing. Appraisal costs are incurred to determine whether a product or service conforms to quality requirements and are a preventive measure to avoid internal and external failure costs. Salvage costs are the costs incurred in disposing of a defective product. Retention costs are related to maintaining records and information related to quality control. Internal failure costs include any costs incurred in addressing defects discovered in the production process, such as the cost of reworking a product or the cost of scrap. External failure costs are those that arise after a product has been delivered to a customer, such as warranty claims and product recalls.

For Cost of Quality (COQ) Reporting Purposes, Materials Inspection Costs