Figure 21-7
at the Beginning of the Year, Andrew Company

question 54

Multiple Choice

Figure 21-7
At the beginning of the year, Andrew Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years: $\begin{array}{lrr}&\text { Freceding Year } & \text { Current Year } \\\text { Sales } & £ 2,400,000 & £ 2,400,000 \\\text { Quality training } & 30,000 & 48,000 \\\text { Material inspections } & 7,000 & 8,000 \\\text { Scrap } & 48,000 & 30,000 \\\text { Rework } & 60,000 & 48,000 \\\text { Product inspection } & 10,000 & 12,000 \\\text { Product warranty } & 36,000 & 24,000\end{array}$
-Refer to Figure 21-7. If quality costs had been reduced to 2.5 per cent of sales in the current year, profits would have increased by

• A)£110,000.
• B)£108,400.
• C)£103,200.
• D)£100,200.

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Definitions:

Abraham Maslow

A psychologist best known for creating Maslow's hierarchy of needs, a theory in psychology explaining human motivation.

Total Quality Management

A management approach focused on continuous improvement of processes in products and services, aiming for long-term success through customer satisfaction.

Decision-Making Power

The authority to make choices or determine courses of action within an organization or group, often held by leaders or decision-makers.

Styles of Listening

Different ways of listening in communication, including active, passive, selective, and empathetic listening.