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Azure Company Uses the Multiplier Method to Estimate Hidden Quality

Question 2

Multiple Choice

Azure Company uses the multiplier method to estimate hidden quality costs. The multiplier is determined to be 3, based on experience. Accounting records show that the measured external failure costs are $330,000. Which of the following is the total external failure cost?


A) $330,000
B) $110,000
C) $990,000
D) $339,900

Correct Answer:

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