Cost of activities incurred to remedy shipment of defective products to customers are classified as:

Question

Quizplus · Accepted Answer

External failure costs are expenses incurred when products or services fail to meet quality standards but are not detected until after delivery to the customer. Remedying shipments of defective products to customers falls under this category, as it involves addressing failures that occur outside the organization after the product has reached the customer.

Cost of Activities Incurred to Remedy Shipment of Defective Products