HNW Ltd.
HNW Ltd. manufactures and sells food processors. A popular consumer magazine has recently evaluated food processors and has ranked HNW’s processors as being of ‘poor quality’. As a result, HNW’s management team has begun to analyse all costs associated with their food processors in more detail, and the following data has been compiled:
$\begin{array}{lr}
\text { Scrap costs } & \$ 80000 \
\text { Quality training } & 75000 \
\text { Warranty claims } & 100000 \
\text { Rework costs } & 50000 \
\text { Inspection of incoming materials } & 30000 \
\text { Product quality audits } & 60000 \
\text { Statistical nrocess control } & 40000
\end{array}$
-What are HNW's total appraisal (detection)costs?
A) $130 000
B) $205 000
C) $ 90 000
D) $100 000

Question

Quizplus · Accepted Answer

Appraisal (detection) costs are costs incurred to detect defective products before they are shipped to customers. For HNW Ltd., these include the costs for "Inspection of incoming materials" ($30,000) and "Product quality audits" ($60,000), totaling $90,000.

HNW Ltd HNW Ltd -What Are HNW's Total Appraisal (Detection)costs? A) $130 000 B)

HNW Ltd
HNW Ltd -What Are HNW's Total Appraisal (Detection)costs?
A) $130 000
B)