At the beginning of the year, Cinnabar Company initiated an environmental cost reduction program. To help assess the impact of the environmental cost reduction improvement program, the following data were collected for the year: Operating costs$2,500,000Designing products2,500Auditing environmental activities6,000Recycling products22,000Disposing of toxic waste37,000Testing for contamination15,000Cleaning up oil spills41,500Which of the following expresses the environmental costs incurred on prevention activity as a percentage of operating costs (rounded to two decimal places)? a.0.98% b.0.15% c.2.46% d.4.96%

Answered: At the beginning of the year, Cinnabar…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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At the beginning of the year, Cinnabar Company initiated an environmental cost reduction program. To help assess the impact of the environmental cost reduction improvement program, the following data were collected for the year:


Operating costs	$2,500,000
Designing products	2,500
Auditing environmental activities	6,000
Recycling products	22,000
Disposing of toxic waste	37,000
Testing for contamination	15,000
Cleaning up oil spills	41,500

Which of the following expresses the environmental costs incurred on prevention activity as a percentage of operating costs (rounded to two decimal places)?

	a.	0.98%
	b.	0.15%
	c.	2.46%
	d.	4.96%

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