Certified Quality Engineer (CQE) Practice Exam 2026 - Comprehensive All-in-One Study Guide for Exam Success!

The correct definition of "cost of quality" involves understanding the total costs related to ensuring that a product or service meets quality standards. This encompasses several components: the costs of preventing defects (prevention costs), the costs of appraising products to ensure they meet quality standards (appraisal costs), the costs associated with defects that occur (internal failure costs), and costs incurred due to failure after the product or service has been delivered (external failure costs).

By focusing on the comprehensive picture of all these costs, organizations can ascertain the true expense associated with maintaining quality. This understanding can lead to improvements in processes, reduced unnecessary costs, and ultimately, a higher satisfaction level among customers. In contrast, the other options focus on narrower aspects of costs or revenue related to quality, without capturing the holistic concept that "cost of quality" aims to represent. This is why the first option is the most accurate definition.