Which of the following would be classified as an external failure cost on a quality cost report?
A) Amortization of test equipment.
B) Test and inspection of in-process goods.
C) Test and inspection of incoming materials.
D) Warranty repairs and replacements.

Question

Quizplus · Accepted Answer

Warranty repairs and replacements are costs incurred after a product has been shipped to customers and are considered external failure costs, as they are incurred as a result of quality problems that were not detected before the product was released to the customer. Amortization of test equipment is a cost of doing business and therefore not a quality cost. Test and inspection of in-process goods and incoming materials are prevention and appraisal costs, respectively.

Which of the Following Would Be Classified as an External