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Managerial Accounting

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Classify Quality Cost: External Failure

MGRACT-LTOGK2

The cost of quality is generally separated into four categories:

  1. Prevention costs
  2. Appraisal costs
  3. Internal failure costs
  4. External failure costs

Which of the costs below would NOT be classified as an external failure cost?

A

Downtime due to a problem with a machine during production.

B

Lower sales due to poor product performance.

C

Cost of a product recall.

D

The cost of a customer complaint department.