Which of the following choices best describes warranty costs and the cost of lost customer sales respectively?

Question

Quizplus · Accepted Answer

Warranty costs are considered external failure costs as they result from defects in the product that cause customers to return or request repairs. The cost of lost customer sales is also an external failure cost because it arises from customers being dissatisfied with the product and choosing not to buy from the company again. Internal failure costs are costs incurred within the company due to defects in the products or processes, while prevention costs are expenses incurred to prevent defects from occurring in the first place. Therefore, option D is the most appropriate as it describes the two costs as external failure costs.

Which of the Following Choices Best Describes Warranty Costs and the Cost