At the Beginning of a Year, Cinnabar Company Initiated an Environmental

Multiple Choice

At the beginning of a year, Cinnabar 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 year: $\begin{array}{lr}\text { Operating costs } & \$ 2,500,000 \\\text { Designing products } & 2,500 \\\text { Auditing environmental activities } & 6,000 \\\text { Recycling products } & 22,000 \\\text { Disposing of toxic waste } & 37,000 \\\text { Testing for contamination } & 15,000 \\\text { Cleaning up oil spills } & 41,500\end{array}$ Which of the following expresses the environmental cost incurred on prevention activity as a percentage of operating costs? (Round your answer to two decimal places.)

A) 0.15%
B) 4.96%
C) 0.98%
D) 2.46%