At the Beginning of the Year, Mike Gioulis Initiated a Quality

Multiple Choice

At the beginning of the year, Mike Gioulis initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current and preceding years: $\begin{array}{lrr}&\text { Freceding Year }&\text { Current Year }\\\text { Sales } & \$ 2,400,000 & \$ 2,000,000 \\\text { Scrap } & 40,000 & 30,000 \\\text { Rework } & 100,000 & 70,000 \\\text { Product inspection } & 12,000 & 18,000 \\\text { Quality training } & 4,000 & 5,000 \\\text { Material inspections } & 8,000 & 13,000\end{array}$ As a result of quality improvements, profits have increased by

A) $400,000.
B) $58,000.
C) $186,000.
D) $244,000.