Which of the following would be classified as an internal failure cost on a quality cost report?
A)Cost of field servicing and handling complaints.
B)Rework labor and overhead.
C)Supervision of testing and inspection activities.
D)Final product testing and inspection.

Question

Quizplus · Accepted Answer

Rework labor and overhead is considered an internal failure cost because it refers to the costs incurred due to defective goods that are identified and corrected before they are shipped to customers. The other options are not internal failure costs. Cost of field servicing and handling complaints would be considered an external failure cost, supervision of testing and inspection activities is a prevention cost, and final product testing and inspection is an appraisal cost.

Which of the Following Would Be Classified as an Internal