Answer the Following Questions Using the Information Below

question 1

Multiple Choice

Answer the following questions using the information below:
Cysco Corp has a budget of $1,200,000 in 2015 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $100,000 in variable costs. The new method will require $50,000 in training costs and $140,000 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 200,000 units.
Appraisal costs for the year are budgeted at $500,000. The new prevention procedures will save appraisal costs of $50,000. Internal failure costs average $30 per failed unit of finished goods. The internal failure rate is expected to be 5% of all completed items. The proposed changes will cut the internal failure rate by one-half. Internal failure units are destroyed. External failure costs average $50 per failed unit. The company's average external failures average 2.5% of units sold. The new proposal will reduce this rate to 1%. Assume all units produced are sold and there are no ending inventories.
-Management has offered to allow the prevention changes if all changes take place as anticipated and the amounts netted are less than the cost of the equipment.What is the net impact of all the changes created by the preventive changes?

• A) $185,200
• B) $(230,000)
• C) $(234,000)
• D) $(250,000)

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Definitions:

Speech Recognition Tools

Speech recognition tools are software applications that convert spoken language into text, enabling voice-controlled operation of devices and information processing.

Mobility Issues

Challenges or limitations in moving freely and easily, which can be due to various health conditions or physical impediments.

Synchronous Tools

Technology tools that enable real-time communication and collaboration among users in different locations.

Asynchronous Tools

Digital tools or platforms that allow communication or work to take place at different times, not requiring simultaneous participation.