Which of the following cost items should be classified as an internal failure cost on a cost of quality report?
A) Net cost of scrap
B) Customer returns of defective products
C) Training for quality control employees
D) Patent cost for a new product

Question

Quizplus · Accepted Answer

Internal failure costs are costs associated with defects found before the delivery of a product to the customer. The net cost of scrap is an example of an internal failure cost because it represents material that was wasted due to not meeting quality standards before it reached the customer.

Which of the Following Cost Items Should Be Classified as an Internal