As Part of Its Environmental Cost Reporting System, McClaren Company

question 32

Multiple Choice

As part of its environmental cost reporting system, McClaren Company tracks its total environmental costs. Consider the cost and sales data given: $\begin{array}{rrrr}&\text { Total }\\\text { Year }& \text { Environmental Costs }& \text { Sales Revenue } & \text { Operating Costs }\\2018 & \$ 3,750,000 & \$ 31,250,000 & \$ 25,000,000 \\2019 & 3,125,000 & 31,250,000 & \$ 25,000,000 \\2020 & 2,750,000 & 39,375,000 & \$ 25,000,000 \\2021 & 2,406,250 & 39,375,000 & \$ 25,000,000\end{array}$
What is the environmental costs as a percentage of sales for 2019?

• A)100%
• B)10%
• C)80%
• D)1,000%

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Definitions:

Revenue

The total amount of money generated by the sale of goods or services related to a company's primary operations.

Accounting Cycle

The process of recording, classifying, summarizing, and interpreting financial transactions over a fiscal period, culminating in the preparation of financial statements.

Purchasing Cycle

A series of steps that a company goes through to acquire goods or services, from the identification of a need to the approval of the invoice for payment.