Question
29. At the beginning of the year, Kowalski Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To
29. At the beginning of the year, Kowalski Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:
Preceding YearCurrent YearSales$3,000,000$3,000,000Quality training3,0004,500Material inspections7,50012,000Scrap60,00045,000Rework120,00075,000Product inspection15,00030,000Product warranty105,00082,500For the current year, external failure costs are what percentage of sales?
a. 2.75%
b. 1.50%
c. 2.50%
d. 4.25%
30. Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years:
Preceding YearCurrent YearSales$3,000,000$3,000,000Quality training3,0004,500Material inspections7,50012,000Scrap60,00045,000Rework120,00075,000Product inspection15,00030,000Product warranty105,00082,500As a result of quality improvements, profits have increased by
a. $22,500.
b. $61,500.
c. $15,000.
d. $97,500.
31. Information about DeLorean Corporation is as follows:
2018 2019 Output (units)40,00042,000Selling price per unit$25.00$25.00 Change in profits$48,012.50 Profit-linked measurements: Materials$550.00Labor 412.50What is the price-recovery component?
a. $47,050.00
b. $40,012.50
c. $962.50
d. ($962.50)
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