Q19-24RQ - Horngren'S Financial And Managerial Accounting

Question

Why are some quality costs hard to measure?

Step-by-Step Solution

Answer

Quality costs are hard to measure due to the lack of certain measurements or due to nonfinancial events. 

Quality cost

Quality costs are costs incurred for the purpose of improving the quality of products or services. There are our types of costs under JIT costing –

a) Prevention cost

b) Appraisal cost

c) Internal failure cost

d) External failure cost

 

Quality cost hard to measure

Some quality costs are hard to measure as they may be nonfinancial or there may not be any proper standard to measure them.

Examples of such costs are – Profit loss due to dissatisfaction of customers.