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 analyze all costs associated with their food processors in more detail, and the following data has been compiled:
Refer to the HNW Ltd. information above. What are HNW's total appraisal (detection) costs?
A) $130,000
B) $205,000
C) $90,000
D) $100,000

Question

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 analyze all costs associated with their food processors in more detail, and the following data has been compiled:
 Refer to the HNW Ltd. information above. What are HNW's total appraisal (detection) costs?
A) $130,000 
B) $205,000 
C) $90,000 
D) $100,000

Quizplus · Accepted Answer

Appraisal (detection) costs refer to the costs associated with detecting poor-quality products before they are shipped to customers. From the given data, we can see that HNW has incurred the following appraisal costs:

- Quality assurance labor costs: $50,000
- Inspection of incoming raw materials: $30,000
- Inspection of finished products: $50,000

Adding these costs, we get $130,000 as the total appraisal (detection) costs for HNW Ltd.

HNW Ltd HNW Ltd