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.