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

question 24

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. For the current year, prevention costs are what percentage of sales?

• A)9.00%
• B)8.25%
• C)7.00%
• D)2.00%

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Definitions:

Strategic Management

The ongoing planning, monitoring, analysis, and assessment necessary to meet an organization's goals and objectives.

Core Values Assessment

An evaluative process to determine the fundamental beliefs that drive behaviors and decision-making within an individual or organization.

Operating Objectives

Short-term targets or goals that an organization seeks to meet as part of its daily operations, often specific and measurable.

Adaptive Organisation

An organization that is capable of adjusting and evolving its strategies, structures, and processes in response to changes in the environment.