Which of the following categories includes costs incurred in detecting poor quality goods or services?
A) External failure costs
B) Prevention costs
C) Appraisal costs
D) Internal failure costs

Question

Quizplus · Accepted Answer

Appraisal costs include the costs of detecting poor quality goods or services, such as inspection and testing. External failure costs are costs incurred after the product or service has been delivered to the customer and found to be of poor quality. Prevention costs are incurred in order to prevent poor quality from occurring in the first place. Internal failure costs are incurred when poor quality goods or services are produced but not detected before delivery to the customer, such as the cost of rework or scrap.

Which of the Following Categories Includes Costs Incurred in Detecting