At the Beginning of the Year, Jim Jackson Initiated a Quality

question 105

Multiple Choice

At the beginning of the year, Jim Jackson 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:
$\begin{array}{lrr}&\underline{\text { Preceding Year }} &\underline{\text { Current Year}}\\\text { Sales } & \$ 2,400,000 & \$ 2,000,000 \\\text { Scrap } & 40,000 & 30,000 \\\text { Rework } & 100,000 & 70,000 \\\text { Product inspection } & 12,000 & 18,000 \\\text { Quality training } & 4,000 & 5,000 \\\text { Material inspections } & 8,000 & 13,000 \\\text { Product warranty } & 80,000 & 50,000\end{array}$

-Refer to the figure.For the current year,what percentage of sales are internal failure costs?

• A)2.50%
• B)5.00%
• C)7.50%
• D)9.30%

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