The Following Information Pertains to Bartolo Company for the Current

question 33

Essay

The following information pertains to Bartolo Company for the current year: $\begin{array}{lr}\text { Sales } & \$ 12,000,000 \\\text { Internal failure costs } & 400,000 \\\text { External failure costs } & 300,000 \\\text { Apprai sal costs } & 225,000 \\\text { Prevention costs } & 150,000 \\\text { Cost of goods sold } & 6,500,000\end{array}$
Required:
Calculate by how much profits would increase if quality costs were reduced to 2.0 percent of sales.

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Definitions:

Accepts Credit Cards

This term indicates a business's or entity's capability to process transactions using credit cards as a form of payment.

Form of Factoring

A financial transaction where a business sells its accounts receivable to a third party at a discount to improve cash flow.

Securitizations

The process of pooling various types of contractual debt such as mortgages or loans and selling their related cash flows to third party investors as securities.

Consolidate

The process of combining financial statements from different entities within a group to produce a single set of financial statements.