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Answer the Following Questions Using the Information Below

question 62

Multiple Choice

Answer the following questions using the information below:
LaCrosse Products has a budget of $900,000 in 2015 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $80,000 in variable costs. The new method will require $40,000 in training costs and $100,000 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 150,000 units.
Appraisal costs for the year are budgeted at $600,000. The new prevention procedures will save appraisal costs of $50,000. 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 do external failure costs change if all changes are as anticipated with the new prevention procedures? Assume all units produced are sold and there are no ending inventories.

Definitions:

Reverse Alphabetical Order

Reverse alphabetical order is the arrangement of words or data in descending Z to A sequence, as opposed to the more common A to Z alphabetical order.

Customer Table

A database table that stores information about customers, including details such as names, addresses, and purchase history.

Validation Rule

A set of conditions or rules that data must meet to be accepted by a system or application, often used in databases and form inputs to ensure data integrity.

Customer Type Field

A designated area in a database or application form where the category or type of customer is specified.