Final answer:
Quality costs for McDonald's are the expenses incurred to maintain product and service standards, which vary from those of competitors like Costco, who emphasize fair wages and benefits. These include costs of updating menus and adapting to healthier trends and market pressures.
Step-by-step explanation:
Quality costs for a business like McDonald's involve expenses related to maintaining standards that prevent defects and ensure customer satisfaction. These costs fall under four categories: prevention costs, appraisal costs, internal failure costs, and external failure costs. In comparison with businesses such as Chipotle, Panera, and Costco, the latter is known for its efforts to offer competitive wages and benefits to their employees, which can be viewed as part of their quality costs in ensuring a satisfied and motivated workforce, thereby potentially reducing turnover and errors.
Contrastingly, McDonald's might incur different quality costs, including those related to adapting their offerings to an ever-increasing demand for healthier options, responding to market pressures exemplified by the de-McDonaldization trends, and staying competitive in the fast-food industry. For example, menu costs can be significant for businesses in the fast-food industry, reflecting the expenditures involved in continually updating and changing menu prices in response to market demands and economic factors, such as inflation.