Randall 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.
$\begin{array}{ccc}
&&\text { Environmental Costs as } \
\text { Year } & \text { Operating Cost } &\text { Percent of Operating Cost }\
1 & \$ 2,000,000 & 23.0 \
2 & 2,200,000 & 20.0 \
3 & 2,200,000 & 16.0 \
4 & 2.400 .000 & 12.0
\end{array}$
a.Compute the environmental quality costs for all four years.
b.How much did net income increase from Year 1 to Year 2 because of quality improvements? From Year 2 to Year 3? From Year 3 to Year 4?

Question

Randall 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.
 $\begin{array}{ccc}
&&\text { Environmental Costs as } \
\text { Year } & \text { Operating Cost } &\text { Percent of Operating Cost }\
1 & \$ 2,000,000 & 23.0 \
2 & 2,200,000 & 20.0 \
3 & 2,200,000 & 16.0 \
4 & 2.400 .000 & 12.0
\end{array}$ 
a.Compute the environmental quality costs for all four years.
b.How much did net income increase from Year 1 to Year 2 because of quality improvements? From Year 2 to Year 3? From Year 3 to Year 4?

Quizplus · Accepted Answer

The Answer of Randall 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.
 $\begin{array}{ccc}
&&\text { Environmental Costs as } \
\text { Year } & \text { Operating Cost } &\text { Percent of Operating Cost }\
1 & \$ 2,000,000 & 23.0 \
2 & 2,200,000 & 20.0 \
3 & 2,200,000 & 16.0 \
4 & 2.400 .000 & 12.0
\end{array}$ 
a.Compute the environmental quality costs for all four years.
b.How much did net income increase from Year 1 to Year 2 because of quality improvements? From Year 2 to Year 3? From Year 3 to Year 4?

Randall Corporation Reported the Following Operating Costs and Environmental Quality