At the Beginning of the Year, Andrew Company Initiated an Environmental

question 128

Multiple Choice

At the beginning of the year, Andrew Company initiated an environmental cost reduction program. To help assess the impact of the environmental cost reduction improvement program, the following data were collected for the current and preceding year:
$\begin{array}{lrr}& \underline{\text {Preceding Year}}& \underline{\text {Current Year}}\\\text { Operating costs } & \$ 2,400,000 & \$ 2,400,000 \\\text { Training employees } & 30,000 & 48,000 \\\text { Inspecting processes } & 7,000 & 8,000 \\\text { Operating pollution control equipment } & 32,000 & 50,000 \\\text { Maintaining pollution equipment } & 60,000 & 28,000 \\\text { Developing environmental performance measures } & 10,000 & 12,000 \\\text { Cleaning up lake } & 36,000 & 24,000\end{array}$
-Refer to the figure.For the current year,what percentage of operating costs are external failure costs ?

• A)0.8350%
• B)1.0000%
• C)1.1875%
• D)1.5350%

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Definitions:

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