The amounts of voluntary costs and failure costs:
A) are equal by definition.
B) tend to move in opposite directions (as one increases the other decreases).
C) tend to move in the same direction (as one increases the other increases).
D) None of these answers is correct.

Question

Quizplus · Accepted Answer

Voluntary costs are costs that an organization chooses to incur in order to improve quality, while failure costs are costs incurred as a result of poor quality. As an organization invests more in voluntary costs to improve quality, it should see a decrease in failure costs. Therefore, the amounts of voluntary costs and failure costs tend to move in opposite directions.

The Amounts of Voluntary Costs and Failure Costs