The Following Information Pertains to James Adams Corp Quality Costs Are What Percentage of Sales?
A)16

question 5

Multiple Choice

The following information pertains to James Adams Corp. for the current year: $$\begin{array} { l r } \text { Sales } & \$ 3,125,000 \\\text { Internal failure costs } & 450,000 \\\text { External failure costs } & 180,000 \\\text { Appraisal costs } & 126,000 \\\text { Prevention costs } & 90,000 \\\text { Cost of goods sold } & 1,350,000\end{array}$$ Quality costs are what percentage of sales?

• A)16.0%
• B)27.1%
• C)7.0%
• D)3.0%

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Definitions:

Imperfectly Competitive Markets

Markets in which individual sellers have some control over the price due to product differentiation, barriers to entry, or other factors, unlike in perfect competition.

Competition

Economic rivalry among businesses fighting for the same customers or markets, characterized by the struggle to attract customers, lower costs, and improve products and services.

Market Power

Refers to the ability of a company or firm to raise and maintain prices above the level that would prevail under competition.

Raise Price

The action of increasing the cost at which goods or services are sold, often to reflect increased costs or to improve profit margins.