What costs are incurred when products and services fail to either conform to requirements or satisfy customer needs after being delivered to customers?
A)prevention costs
B)appraisal costs
C)internal failure costs
D)external failure costs

Question

Quizplus · Accepted Answer

External failure costs are incurred when products and services fail to conform to requirements or satisfy customer needs after being delivered to customers. This may include costs associated with product recalls, warranty claims, customer complaints, lost sales and damage to the company's reputation. Prevention costs are incurred to prevent defects from occurring, appraisal costs are incurred to detect defects before they are delivered to customers and internal failure costs are incurred when defects are caught before delivery to customers but after production.

What Costs Are Incurred When Products and Services Fail to Either