Which cost category is associated with activities to detect defects before shipping?

• A. Prevention costs
• B. Appraisal costs
• C. Internal failure costs
• D. External failure costs

Answer: (B)

Detecting defects before the product goes to the customer is covered by appraisal costs. These are the costs of measuring, inspecting, testing, and auditing quality to identify defects prior to shipping. They are planned activities aimed at uncovering problems before they reach the outside world.

Prevention costs, by contrast, are geared toward reducing the likelihood of defects in the first place (training, quality planning, process improvements). Internal failure costs arise from defects found during production that require rework or scrap, while external failure costs come from defects found after the product has been shipped (warranty, returns, field service).