At the beginning of the year, Gong Nara 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 Year	Current Year
Sales	P3,000,000	P3,000,000
Quality training	3,000	4,500
Material inspections	7,500	12,000
Scrap	60,000	45,000
Rework	120,000	75,000
Product inspection	15,000	30,000
Product warranty	105,000	82,500

1. For the current year, prevention costs are what percentage of sales?

0.0005

0.0015

0.0065

0.015

2. For the current year, appraisal costs are what percentage of sales?

0.014

0.004

0.0014

0.01

3. If quality costs had been reduced to 2.5 percent of sales in the current year, profits would have increased by

P91,500

P37,500

P255,000

P174,000

4. For the current year, internal failure costs are what percentage of sales?

0.015

0.029

0.04

0.025

5. For the current year, external failure costs are what percentage of sales?

0.0275

0.025

0.0425

0.015

6. As a result of quality improvements, profits have increased by

P15,000

P97,500

P22,500

P61,500