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

question 47

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 internal failure?

• A)1.25%
• B)2.00%
• C)3.25%
• D)4.25%

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Definitions:

Testing Costs

Expenses associated with the process of verifying the functionality, quality, or performance of a product before its market release.

Fixed Asset

Long-term tangible property held for business use and not expected to be converted into cash in the current or upcoming fiscal year.

Normal Operations

Refers to the regular and routine activities of a business under usual conditions.

Long Lived

Assets or properties owned by a company that are expected to provide economic benefits or value over an extended period, often exceeding one year.