Appraisal Costs

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DEFINITION of 'Appraisal Costs'

A specific category of quality control costs. Companies pay appraisal costs as part of the quality control process to ensure that their products and services meet customer expectations and regulatory requirements. These costs could include expenses for field tests and inspections.

INVESTOPEDIA EXPLAINS 'Appraisal Costs'

Appraisal costs can be a key expense for companies seeking to maintain high levels of customer and regulatory satisfaction. Payments for secret shopper salaries, factory floor inspectors and technical screening equipment all fall into this category. Companies that spend large amounts of money for appraisal costs show that they are concerned with their reputations.

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