How Much Does External Failure Costs Change If All Changes

question 138

Multiple Choice

How much does external failure costs change if all changes are as anticipated with the new prevention procedures?

• A) $57,024 decrease
• B) $57,600 increase
• C) $57,600 decrease
• D) $72,000 decrease
• E) $72,624 increase

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Definitions:

Cost Flow Assumption

An accounting method that determines the value of remaining inventory and the cost of goods sold, such as FIFO or LIFO.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, assigning weights to some numbers more than others.

FOB Shipping Point

This term indicates that the buyer is responsible for the goods and their shipping costs as soon as the goods leave the seller's premises.