The Following Information Pertains to Molotov, Inc If Quality Costs Were Reduced to 2

question 120

Multiple Choice

The following information pertains to Molotov, Inc., for the current year: $\begin{array}{lr}\text { Sales } & \$ 20,000,000 \\\text { Internal failure costs } & 600,000 \\\text { External failure costs } & 400,000 \\\text { Appraisal costs } & 250,000 \\\text { Prevention costs } & 100,000 \\\text { Cost of goods sold } & 10,000,000\end{array}$ If quality costs were reduced to 2.5 percent of sales, profits would increase by

• A)$1,000,000.
• B)$850,000.
• C)$500,000.
• D)$250,000.

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Definitions:

Directed Verdict

A legal ruling by a judge, made during a trial, declaring that no reasonable jury could decide in favor of the opposing party based on the presented evidence.

New Trial

A court-ordered repetition of all or part of a legal proceeding, usually due to procedural error, new evidence, or unfair trial.

Judgment Creditor

A creditor who is legally entitled by a court’s judgment to collect the amount of the judgment from a debtor.

Court's Judgment

The final decision made by a judge or court in a legal case, determining the resolution of the dispute.