Question 1

An analyst is reviewing the 'Cost of Quality' report for a manufacturing firm. The report lists the following costs:
1. Warranty claims processing
2. Quality engineering and training
3. Final product testing and inspection
4. Rework of defective units before shipping

Which of these is classified as an 'Internal Failure Cost'?

Accepted Answer

Categorize each cost: Prevention (stop defects happening), Appraisal (check for defects), Internal Failure (fix defects before shipping), External Failure (fix defects after shipping).

Question 2

What mistakes do candidates make on this CPA question?

Accepted Answer

Confusing Appraisal (checking) with Internal Failure (fixing what was found).

How to approach this question

Full Answer

Common mistakes

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