Final answer:
TRUE. Appraisal costs increase as the variation of output increases.
Step-by-step explanation:
Appraisal costs increase as the variation of output increases. Appraisal costs refer to the costs associated with evaluating the quality of products or services. When there is more variation in the output, it becomes more important to ensure the quality of each individual unit, which requires additional appraisal activities and thus increases the appraisal costs.
Appraisal costs are a category of quality management costs associated with the assessment and verification of products, processes, or services to ensure they meet established standards and requirements. These costs are part of the broader framework of quality management and are incurred to prevent, detect, or correct defects or non-conformities. Appraisal costs are incurred regardless of whether defects are found. The goal is to ensure that products or services meet specified quality standards.