Which of the Following Would Be Classified as an External

question 3

Multiple Choice

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

• A) Quality training.
• B) Liability arising from defective products.
• C) Test and inspection of incoming materials.
• D) Quality engineering.

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Definitions:

Consumer Division

A part of a company focused on selling products or services directly to end-users or consumers.

Fixed Expenses

Expenses that remain constant regardless of the amount of goods produced or sold, including costs like lease payments, wages, and insurance fees.

Break-even Sales

The amount of revenue required to cover both the variable and fixed costs of production, resulting in no profit or loss.

Fixed Expenses

Costs that do not vary with the level of production or sales volume, such as rent or salaries.