Earll Company's quality cost report is to be based on the following data:

-A quality cost incurred to detect individual units that do not conform to specifications is an example of a(n):
A) prevention cost.
B) appraisal cost.
C) external failure cost.
D) internal failure cost.

Question

Earll Company's quality cost report is to be based on the following data:

-A quality cost incurred to detect individual units that do not conform to specifications is an example of a(n):
A) prevention cost. 
B) appraisal cost. 
C) external failure cost. 
D) internal failure cost.

Quizplus · Accepted Answer

The cost incurred to detect individual units that do not conform to specifications is called an appraisal cost. Appraisal costs are incurred to ensure that products or services meet the required quality standards, such as inspection, testing, and auditing. It is important to note that prevention costs are incurred to prevent defects, while appraisal costs are incurred to detect defects.

Earll Company's Quality Cost Report Is to Be Based on the Following