Figure 14-7 At the beginning of the year, Andrew Company initiated an environmental cost reduction program.To help assess the impact of the environmental cost reduction improvement program, the following data was collected for the current and preceding year:

-Refer to Figure 14-7.For the current year, internal failure costs are what percentage of operating costs?

Question

Figure 14-7 At the beginning of the year, Andrew Company initiated an environmental cost reduction program.To help assess the impact of the environmental cost reduction improvement program, the following data was collected for the current and preceding year:
 
-Refer to Figure 14-7.For the current year, internal failure costs are what percentage of operating costs?

Quizplus · Accepted Answer

To calculate the percentage of internal failure costs for the current year as a percentage of operating costs, we need to divide the internal failure costs for the current year by the current year's operating costs and multiply the result by 100. 
Internal failure costs for the current year = $385,000 
Operating costs for the current year = $11,800,000 
($385,000 ÷ $11,800,000) x 100 = 3.25%
Therefore, the correct answer is B) 3.25%.

Figure 14-7 at the Beginning of the Year, Andrew Company