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:

Book Value

The difference between the cost of a depreciable asset and its related accumulated depreciation.

Opportunity Cost

The potential benefit that may be obtained from following an alternative course of action.

Nonfinancial Information

Information that is not monetary in nature, such as customer satisfaction, employee turnover, and operational efficiency, used in decision making.

Unprofitable Segment

A division or branch of a company that does not generate profit and may cause a financial drain on the business.