Maroone Corporation reported the following operating costs and environmental quality costs for the past four years. Assume that all environmental quality costs are variable and that all changes in the quality cost ratios are due to an environmental cost reduction program. $\begin{array}{rrr}&\text { Quality Costs as }\
\text { Year }& \text { OperatingCosts } & \text { Percent of OperatingCosts }\
2018 & \$ 4,000,000 & 24.0 \
2019 & 4,100,000 & 22.0 \
2020 & 4,200,000 & 20.0 \
2021 & 4,300,000 & 18.0
\end{array}$ What is the change in environmental costs from 2019 to 2020?
A)$840,000
B)$902,000
C)$58,000
D)$62,000

Question

Quizplus · Accepted Answer

The environmental costs for 2019 are 22% of $4,100,000, which equals $902,000. For 2020, the costs are 20% of $4,200,000, which equals $840,000. The change from 2019 to 2020 is $840,000 - $902,000 = -$62,000.

Maroone Corporation Reported the Following Operating Costs and Environmental Quality