The following information pertains to Harrison Corp.for the current year: $\begin{array}{lr}
\text { Sales } & \$ 3,000,000 \
\text { Internal failure costs } & 375,000 \
\text { External failure costs } & 150,000 \
\text { Appraisal costs } & 105,000 \
\text { Prevention costs } & 75,000 \
\text { Cost of goods sold } & 1,125,000
\end{array}$
What percentage of sales are quality costs?

Question

The following information pertains to Harrison Corp.for the current year: $\begin{array}{lr}
\text { Sales } & \$ 3,000,000 \
\text { Internal failure costs } & 375,000 \
\text { External failure costs } & 150,000 \
\text { Appraisal costs } & 105,000 \
\text { Prevention costs } & 75,000 \
\text { Cost of goods sold } & 1,125,000
\end{array}$
 What percentage of sales are quality costs?

Quizplus · Accepted Answer

Quality costs include internal failure costs, external failure costs, appraisal costs, and prevention costs. Adding these together: $375,000 + $150,000 + $105,000 + $75,000 = $705,000. To find the percentage of sales, divide the total quality costs by sales: $705,000 / $3,000,000 = 23.5%.

The Following Information Pertains to Harrison Corp What Percentage of Sales Are Quality Costs? A)2

The Following Information Pertains to Harrison Corp What Percentage of Sales Are Quality Costs?
A)2