Inspection costs for reworked units would be classified,for COQ reporting purposes,as:
A)Prevention costs.
B)Retention costs.
C)Appraisal costs.
D)Internal failure costs.
E)External failure costs.

Question

Quizplus · Accepted Answer

Inspection costs for reworked units are considered as internal failure costs because they are incurred due to a defect or error in the product, which is discovered internally before the product is shipped to the customer. These costs are a result of poor quality control during the manufacturing process and are therefore classified as internal failure costs.

Inspection Costs for Reworked Units Would Be Classified,for COQ Reporting