Lower sales due to poor product performance is an example of which type of cost?
A)external failure cost
B)internal failure cost
C)appraisal cost
D)prevention cost

Question

Quizplus · Accepted Answer

External failure costs are costs associated with defects that are found after the product reaches the customer, leading to returns, repairs, and lost sales. Lower sales due to poor product performance is an example of an external failure cost, as it occurs after the product has been delivered to the customer.

Lower Sales Due to Poor Product Performance Is an Example