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 _____.A. prevention costsB. appraisal costsC. internal failure costsD. external failure costs

Answer 1

Prevention costs.

Step-by-step explanation:

Prevention costs are cost arising due to a need to improve the manufacturing process. The manufacturing process may be machine intensive or human capital intensive. in the case of Scorla Automobiles, the repairs of faulty machines will prevent internal failure cost which may arise due to product (final product) nonconformity to required quality standards and also external cost like legal lawsuits from customers due to product failure.

Answer 2

internal cost of failure

Step-by-step explanation:

In the processing and manufacturing sectors, there are broadly four main types of quality costs. Poor quality costs comprises of internal costs of failure and external costs of failure. while good quality cost comprises of cost of evaluation and cost of prevention.

Internal costs of failure are described as the costs incurred by the company due to production failures is found before the product is delivered to the consumer.

In this situation, such machines must be reduced in manufacturing section as they were found faulty, leading in lost power of machinery. This form of loss is known as internal cost of failure.