Which of the Following Would Be Classified as an External

question 36

Multiple Choice

Which of the following would be classified as an external failure cost on a quality cost report?

• A) Reentering data because of keying errors.
• B) Customer returns arising from quality problems.
• C) Test and inspection of in-process goods.
• D) Rework labor and overhead.

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Definitions:

Policymakers

Individuals or groups responsible for making decisions and establishing regulations that guide the economic, social, and political governance of a society.

Marginal Benefit

The plus in satisfaction or usefulness someone gets by consuming an extra unit of a given product or service.

Socially Optimal

A situation in economics where resources are allocated in the most efficient way from a societal perspective.

Pigouvian Tax

A tax imposed on activities that generate negative externalities, intended to correct an undesirable or inefficient market outcome by being equal in value to the externality.