The following information pertains to Kanyon, Inc., for the current year:
$$\begin{array} { l r }
\text { Sales } & \$ 2,000,000 \
\text { Internal failure costs } & 250,000 \
\text { External failure costs } & 100,000 \
\text { Appraisal costs } & 70,000 \
\text { Prevention costs } & 50,000 \
\text { Cost af goods sold } & 750,000
\end{array}$$
-Refer to the figure.Quality costs are what percentage of sales?

Question

The following information pertains to Kanyon, Inc., for the current year:
$$\begin{array} { l r } 
\text { Sales } & \$ 2,000,000 \
\text { Internal failure costs } & 250,000 \
\text { External failure costs } & 100,000 \
\text { Appraisal costs } & 70,000 \
\text { Prevention costs } & 50,000 \
\text { Cost af goods sold } & 750,000
\end{array}$$
-Refer to the figure.Quality costs are what percentage of sales?

Quizplus · Accepted Answer

Quality costs include internal failure costs, external failure costs, appraisal costs, and prevention costs, which total $470,000 ($250,000 + $100,000 + $70,000 + $50,000). The percentage of sales is calculated as ($470,000 / $2,000,000) * 100% = 23.5%.

The Following Information Pertains to Kanyon, Inc -Refer to the Figure