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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:  Freceding Year  Current Year  Sales £2,400,000£2,400,000 Quality training 30,00048,000 Material inspections 7,0008,000 Scrap 48,00030,000 Rework 60,00048,000 Product inspection 10,00012,000 Product warranty 36,00024,000\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

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Definitions:

AT&T

An American multinational conglomerate holding company that provides telecommunications, media, and technology services globally.

Monopoly

The exclusive possession or control of the supply of or trade in a commodity or service by a single company or group.

Mass Mediums

Channels or technologies used to deliver content to a large audience, such as television, radio, newspapers, and the internet.

Telegraph

A system for transmitting messages from a distance along a wire, especially one creating signals by making and breaking an electrical connection.

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