Cost incurred in training employees is an example of a(n)________.
A)external failure cost
B)internal failure cost
C)prevention cost
D)appraisal cost

Question

Quizplus · Accepted Answer

Cost incurred in training employees is an example of prevention cost, which is incurred to prevent defects or errors from occurring. Examples of prevention costs include training, quality planning, preventive maintenance, and statistical process control. External failure costs (A) occur after the product or service has been delivered to the customer and result in customer dissatisfaction, returns, and warranty claims. Internal failure costs (B) occur when defects or errors are identified before the product or service is delivered to the customer, resulting in rework or scrap. Appraisal costs (D) are incurred to evaluate the quality of products or services and include inspection, testing, and audits.

Cost Incurred in Training Employees Is an Example of A(n)________