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CMA Final · Strategic Cost Management · Quality Cost Management

Which of the following is classified as an internal failure cost in a cost of quality (COQ) report?

Rework on defective units found before dispatch is an internal failure cost, because the defect is discovered inside the firm before reaching the customer. Warranty claims are external failure costs, testing of incoming materials is appraisal, and training is prevention.

  1. ACost of rework on defective units detected before dispatch to customersCorrect
  2. BWarranty claims paid for defective units sold to customers
  3. CCost of testing raw materials received from suppliers
  4. DCost of training workers in quality improvement methods

Explanation

Internal failure costs arise when defects are found before the product reaches the customer, such as rework and scrap. Warranty claims are external failure costs. Incoming material testing is an appraisal cost, and quality training is a prevention cost.

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