A manufacturing company implemented a new quality management system. In analyzing its cost reports, it identified various costs associated with quality activities. From the list below, which two costs are typically recognized as components of the Cost of Quality (COQ)?
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AExternal Auditing costs and Executive Training costs
BPrevention costs and Appraisal costs
CInsurance costs and Risk Management costs
DMarketing costs and Customer Service costs
✓ Correct answer: B. Prevention costs and Appraisal costsPrevention costs and Appraisal costs are recognized as integral components of the Cost of Quality (COQ). Prevention costs involve activities that minimize the chance of producing poor-quality products, while Appraisal costs are associated with evaluating and auditing to ensure quality. Insurance and risk management deal with overall business risks, Marketing costs focus on product promotion rather than quality, and External Auditing and Executive Training costs do not directly align with quality assurance activities.
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