Forensic Specialists Developed the Following Information for Its First Quarter

question 105

Multiple Choice

Forensic Specialists developed the following information for its first quarter cost of quality report:
$$\begin{array} { | l | r | } \hline \text { Sales } & \$ 5,600,000 \\\hline \text { Cost of goods sold } & \$ 3,360,000 \\\hline \text { Disposing of scrap } & \$ 235,200 \\\hline \text { Quality training } & \$ 84,000 \\\hline \text { Inspecting materials on delivery } & \$ 280,000 \\\hline \text { Performance reviews } & \$ 70,000 \\\hline \text { Resolving customer complaints } & \$ 31,920 \\\hline \text { Certifying suppliers } & \$ 140,000 \\\hline\end{array}$$
The total cost of prevention activities for Forensic Specialists is:

• A) $294,000.
• B) $224,000.
• C) $459,200.
• D) $504,000.

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Definitions:

Selling Price

The amount of money for which a product or service is sold to customers.

Wage Rate

The standard amount of compensation given to employees for their labor, usually expressed per hour or per unit of work done.

Marginal Wage Cost

The additional cost incurred by hiring one more unit of labor, reflecting the change in total wage expenses.

Monopsonistic Labor Market

A labor market in which a single firm is the sole or dominant buyer of labor, giving it power to set wages below competitive levels.