Question

1. In a Cost-of-Quality (COQ) reporting framework, costs incurred in conjunction with the measurement and analysis of data to ascertain conformity of products and services to specification are properly classified as:

External failure costs

Appraisal costs.

Internal failure costs

.Prevention costs.

Value-added costs.

2. Costs incurred because of poor quality found through appraisal prior to delivery of the product to the customer are, in a Cost-of-Quality (COQ) reporting framework, considered:

External failure costs.

Appraisal costs.

Prevention costs.

Internal failure costs.

Conformity costs.

Answer 1

Solution 1) In a Cost-of-Quality (COQ) reporting framework, costs incurred in conjunction with the measurement and analysis of data to ascertain conformity of products and services to specification are properly classified as:

The Correct option is : Appraisal Costs

Explanation:  Appraisal costs are associated with measuring and monitoring activities related to quality. These costs are associated with the suppliers’ and customers’ evaluation of purchased materials, processes, products, and services to ensure that they conform to specifications. They could include:

• Verification: checking of incoming material, process setup, and products against agreed specifications
• Quality audits: confirmation that the quality system is functioning correctly
• Supplier rating: assessment and approval of suppliers of products and services

Solution 2) Costs incurred because of poor quality found through appraisal prior to delivery of the product to the customer are, in a Cost-of-Quality (COQ) reporting framework, considered:

The Correct option is : Internal Failure Costs

Explanation:  Internal failure costs are incurred to remedy defects discovered before the product or service is delivered to the customer. These costs occur when the results of work fail to reach design quality standards and are detected before they are transferred to the customer. They could include:

• Waste: performance of unnecessary work or holding of stock as a result of errors, poor organization, or communication
• Scrap: defective product or material that cannot be repaired, used, or sold
• Rework or rectification: correction of defective material or errors
• Failure analysis: activity required to establish the causes of internal product or service failure