Final answer:
The total amount of appraisal costs incurred by Tea's Tires is $73,000.
Step-by-step explanation:
Appraisal costs are a category of quality costs that include activities aimed at assessing the quality of products or services. From the provided information, the appraisal costs can be calculated by summing up the costs that are directly related to inspecting and evaluating the products manufactured by Tea's Tires. In this case, the inspection of raw materials ($55,000) and the product recalls ($18,000) are the costs that fall under the category of appraisal costs. The total amount of appraisal costs is therefore $73,000.
The total amount of appraisal costs for Tea’s Tires can be computed by summing up the costs associated directly with the inspection and monitoring activities to ensure the quality of the products. Specifically, we add the expenses for inspecting raw materials and equipment maintenance. Therefore, the total appraisal costs are as follows:
Inspecting raw materials: $55,000
Equipment maintenance: $47,000
Total appraisal costs = $55,000 (Inspecting raw materials) + $47,000 (Equipment maintenance) = $102,000.
It is important to note that other costs like product recalls, scrap of defective tires, training lean business practices, and warranty claims are not considered appraisal costs, as they are related to internal and external failures or prevention costs.