Carborundum 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. $\begin{array}{rrr}&\text { Quality Costs as }\
\text { Year }& \text { OperatingCosts } & \text { Percent of OperatingCosts }\
2018 & \$ 3,000,000 & 25.0 \
2019 & 3,100,000 & 23.0 \
2020 & 3,200,000 & 21.0 \
2021 & 3,300,000 & 20.0
\end{array}$ What is the change in environmental costs from 2018 to 2019?
A)$12,000
B)$41,000
C)$37,000
D)$750,000

Question

Quizplus · Accepted Answer

The environmental costs for 2018 are 25% of \$3,000,000, which equals \$750,000. For 2019, the environmental costs are 23% of \$3,100,000, which equals \$713,000. The change from 2018 to 2019 is \$750,000 - \$713,000 = \$37,000.

Carborundum Corporation Reported the Following Operating Costs and Environmental Quality