Internal failure costs
Internal failure costs are losses that occur while the product is in possession of the producer, including rework and scrap costs.
Definition
According to Managing Quality by Foster (6th edition),
- Internal failure costs. Losses that occur while the product is in possession of the producer, including rework and scrap costs.
According to Cost Accounting by Horngren, Datar, Rajan (14th edition),
- Internal failure costs. Costs incurred on defective products before they are shipped to customers.
According to Managerial Accounting by Braun, Tietz (5th edition),
- Internal failure costs. Costs incurred when the company detects and corrects poor-qualiry goods or services before making delivery to customers.
