Roberts 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.
$$\begin{array}{l}
&\text { Quality Costs as }\
\text { Year }&\text { Operatine Casts } & \text { Percent of Operatine Cast } \
\hline20 \mathrm{X} 1& \text { 44,000,000 } & 24.0 \
20 \mathrm{X} 2&4,100,000 & 22.0 \
20 \mathrm{X} 3&4,200,000 & 20.0 \
20 \mathrm{X} 4&4,300,000 & 18.0
\end{array}$$
-Refer to the figure.What is the change in environmental costs from 20X2 to 20X3?

Question

Quizplus · Accepted Answer

To find the change in environmental costs from 20X2 to 20X3, we first calculate the environmental costs for each year by applying the percentage to the operating costs. For 20X2: $4,100,000 \times 22\% = 902,000$. For 20X3: $4,200,000 \times 20\% = 840,000$. The change is $840,000 - 902,000 = -62,000$, indicating a decrease in environmental costs by $62,000.

Roberts Corporation Reported the Following Operating Costs and Environmental Quality