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 are correct.

Question

Quizplus · Accepted Answer

Voluntary costs are costs incurred to prevent defects, while failure costs are costs incurred because of defects. Thus, as a company invests more in preventing defects (incurring more voluntary costs), the number of defects will likely decrease, leading to a decrease in failure costs. Therefore, voluntary costs and failure costs tend to move in opposite directions.

The Amounts of Voluntary Costs and Failure Costs