An increase in appraisal costs will usually result in an increase in:
A) prevention costs.
B) internal failure costs.
C) external failure costs.
D) opportunity costs.

Question

Quizplus · Accepted Answer

An increase in appraisal costs, which are costs associated with inspecting and testing to ensure that products or services meet quality standards, typically leads to a decrease in internal failure costs. This is because more rigorous inspection and testing can identify defects before products reach the customer, reducing the costs associated with rework, scrap, and other failures. However, the question incorrectly suggests an increase in internal failure costs, which is not the usual outcome of increased appraisal costs. The correct understanding is that increased appraisal costs are generally aimed at reducing both internal and external failure costs by catching defects earlier in the process.

An Increase in Appraisal Costs Will Usually Result in an Increase