Which of the following would be classified as an appraisal cost on a quality cost report?
A)Rework labor and overhead.
B)Lost sales arising from a reputation for poor quality.
C)Net cost of scrap.
D)Depreciation of test equipment.

Question

Quizplus · Accepted Answer

Appraisal costs are incurred to determine if products or services meet specified standards and include costs of quality inspections, quality testing, and costs of operating inspection and testing equipment. Depreciation of test equipment is an example of an appraisal cost. Rework labor and overhead, net cost of scrap, and lost sales arising from a reputation for poor quality are examples of internal and external failure costs.

Which of the Following Would Be Classified as an Appraisal