At the Beginning of the Year, Grant Company Initiated a Quality

question 70

Multiple Choice

At the beginning of the year, Grant 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:
$$\begin{array} { l r r } & \text { Preceding Year } & \text { Current Year } \\\text { Sales } & \$ 3,000,000 & \$ 3,000,000 \\\text { Quality training } & 3,000 & 4,500 \\\text { Material inspections } & 7,500 & 12,000 \\\text { Scrap } & 60,000 & 45,000 \\\text { Rework } & 120,000 & 75,000 \\\text { Product inspection } & 15,000 & 30,000 \\\text { Product waranty } & 105,000 & 82,500\end{array}$$
-Refer to the figure.For the current year,what percentage of sales are external failure costs?

• A)1.50%
• B)2.50%
• C)2.75%
• D)4.25%

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Definitions:

Decreased

Refers to a reduction or diminution in size, quantity, or intensity.

Basic Trust

A concept in psychology, originally coined by Erik Erikson, that suggests an essential trustfulness of others as well as a fundamental sense of one's own trustworthiness, developed in early childhood.

Basic Mistrust

A fundamental sense of distrust or insecurity, often stemming from early life experiences.

Erikson's Stages

A theory of psychosocial development outlining eight stages from infancy to adulthood, each characterized by a specific crisis and its resolution.