Question

Fabrick Company's quality cost report is to be based on the following data: Lost sales due to poor quality $ 15,200 Quality data gathering, analysis, and reporting $ 64,700 Net cost of spoilage $ 68,300 Re-entering data because of keying errors $ 20,700 Test and inspection of in-process goods $ 19,500 Final product testing and inspection $ 43,800 Statistical process control activities $ 36,300 Returns arising from quality problems $ 33,100 Downtime caused by quality problems $ 65,000 What would be the total appraisal cost appearing on the quality cost report

Answer 1

Answer:

The total appraisal cost that would appear on the quality cost report is $63,300.

Explanation:

Appraisal costs can be described as costs that are incurred by a company in order to detect some of its products that have defects before they delivered to customers.

Examples of appraisal cost include costs incurred to inspect work-in-process materials, costs incurred to inspect finished goods, supplies used to conduct inspections, and among others.

Based on the above explanation, the total appraisal cost that would appear on the quality cost report can be calculated as follows:

Total appraisal cost = Test and inspection of in-process goods + Final product testing and inspection = $19,500 + $43,800 = $63,300

Therefore, the total appraisal cost that would appear on the quality cost report is $63,300.