External failure costs

External failure costs are monetary losses associated with product failures after the customer has possession of the product. They may include warranty or field repair costs.

Definition

According to Managing Quality by Foster (6th edition),

External failure costs. Monetary losses associated with product failures after the customer has possession of the product. They may include warranty or field repair costs.

According to Cost Accounting by Horngren, Datar, Rajan (14th edition),

External failure costs. Costs incurred on defective products after they are shipped to customers.

According to Managerial Accounting by Braun, Tietz (5th edition),

External failure costs. Costs incurred when the company does not detect poor-quality goods or services until a~er delivery is made to customers.