The Following Information Pertains to Longhorn Company for the Current

question 4

Multiple Choice

The following information pertains to Longhorn Company for the current year: $$\begin{array} { l r } \text { Sales } & \$ 1,000,000 \\\text { Internal failure costs } & 125,000 \\\text { External failure costs } & 50,000 \\\text { Appraisal costs } & 35,000 \\\text { Prevention costs } & 25,000 \\\text { Cost of goods sold } & 375,000\end{array}$$ If quality costs were reduced to 2.5 percent of sales, profits would increase by

• A)$25,000.
• B)$125,000.
• C)$180,000.
• D)$210,000.