External Failure Costs Are Costs That

question 131

Multiple Choice

External failure costs are costs that:

• A)are incurred to prevent quality problems from occurring in the first place.
• B)are incurred to identify defective products before products are shipped to the customer.
• C)result from defects that are caught before the product is shipped to the customer.
• D)occur when a defective product makes its way into the hands of the customer.

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Definitions:

Invoice Number

A unique identification number assigned to an invoice, used to refer to and track the transaction.

Cost-Benefit Analysis

An economic evaluation technique that compares the costs and benefits of a project or decision to determine its feasibility or value.

Accounting Software

Applications or programs used by businesses to track financial transactions and manage accounting operations.

Cost Ratio

A formula that demonstrates the cost of a specific procedure or service.