Final answer:
In the context of the Dittenhoefer fine china case, the time and labor cost associated with inspecting finished items is known as appraisal costs. These costs are part of quality costs for ensuring products meet specifications.
Step-by-step explanation:
In the Dittenhoefer fine china case, the workers who visually inspected the finished items for defects such as chips or cracks were engaging in activities that result in appraisal costs. These costs represent one of the four categories of quality costs that companies incur to ensure that their products meet quality standards.
Appraisal costs are associated with the evaluation or inspection of products to ensure that they are within the specifications. These costs include the labor for inspectors, the equipment used in testing, and any destructive testing that might be necessary. They are part of the cost of the quality management system for preventing defective products from reaching the customer, unlike internal failure costs which are related to defects found before the product reaches the customer, and external failure costs which occur after the defective product has been received by the customer. Prevention costs, on the other hand, are incurred to prevent defects from occurring in the first place.