Answer the Following Questions Using the Information Below

question 34

Multiple Choice

Answer the following questions using the information below:
Nurioopta Products has a budget of $900 000 in 2018 for prevention costs.If it decides to automate a portion of its prevention activities,it will save $65 000 in variable costs.The new method will require $24 000 in training costs and $110 000 in annual equipment costs.Management is willing to adjust the budget for an amount up to the cost of the new equipment.The budgeted production level is 170 000 units.
Appraisal costs for the year are budgeted at $600 000.The new prevention procedures will save appraisal costs of $30 000.Internal failure costs average $15 per failed unit of finished goods.The internal failure rate is expected to be 3% of all completed items.The proposed changes will cut the internal failure rate by one-third.Internal failure units are destroyed.External failure costs average $54 per failed unit.The company's average external failures average 3% of units sold.The new proposal will reduce this rate by 50%.Assume all units produced are sold and there are no ending inventories.
-How much will appraisal costs change assuming the new prevention methods reduce material failures by 40% in the appraisal phase?

• A)$12 000 decrease
• B)$65 000 increase
• C)$30 000 decrease
• D)$240 000 decrease

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Definitions:

Coleoptile

A protective sheath that encloses the young stem in certain monocots.

Grasses

Members of the Poaceae family, which are key agricultural and ecological species, known for their long, slender leaves and roles in ecosystems and food supplies.

Basal Cell

A type of cell found in the lower layers of the epidermis that continuously divides to form new cells, replacing the old ones that die and are shed.

Embryonic Development

The process by which an embryo forms and develops, from fertilization to the fetus stage.