Question

At Scorla Automobiles, a few machines in the assembly section were faulty and had to be shut down till they were repaired. This reduced the output of automobiles for the quarter. In this case, the costs incurred by Scorla Automobiles for repairing the machines are an example of _____.

Answer 1

Answer:

Internal failure costs

Explanation:

Internal failure costs are those costs that occur because of product failure when quality of goods is reviewed.

This occurs before goods are released from the factory for use by the consumer.

Discovery of these failures is done by the internal inspection team of the company.

We have 4 costs of quality: preventive cost, appraisal cost, external failure cost, and internal failure cost.

In this scenario a few machines in the assembly section were faulty and had to be shut down till they were repaired, resulting in reduced the output of automobiles for the quarter.

The incurred cost is internal failure cost