Assume the Multiplier Method Is Used and the Multiplier Is

question 122

Multiple Choice

Assume the multiplier method is used and the multiplier is determined to be 4 based on experience. Accounting records show that the measured external failure costs are $550,000. Then the total external failure costs are estimated to be

• A) $166,667.
• B) $38,500.
• C) $2,200,000.
• D) $4,500,000.