Question

In a Cost of Quality (COQ) report, sales returns and allowances due to quality deficiency would be classified as:

A. Prevention costs.
B. Salvage costs.
C. Appraisal costs.
D. Internal failure costs.
E. External failure costs.

Answer 1

Sales returns and allowances due to quality deficiency in a COQ report are classified as external failure costs.

Step-by-step explanation:

In a Cost of Quality (COQ) report, sales returns and allowances due to quality deficiency would be classified as external failure costs.

External failure costs represent the costs incurred as a result of product or service deficiencies that are identified after delivery to customers. This includes expenses like refunds, warranties, and customer support.