Table 13-2 A New Young Mother Has Opened a Cloth Diaper Service.She

question 70

Multiple Choice

Table 13-2
A new young mother has opened a cloth diaper service.She is interested in simulating the number of diapers required for a one-year-old.She hopes to use this data to show the cost effectiveness of cloth diapers.The table below shows the number of diapers demanded daily and the probabilities associated with each level of demand.

-According to Table 13-2, if the random number 96 were generated for a particular day, what would the simulated demand be for that day?

• A)5
• B)6
• C)7

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Definitions:

Cost Formula

A mathematical equation or model used to determine the total cost of production or service by considering various cost drivers and fixed and variable costs.

Vehicle Operating Cost

The recurring expenses associated with using a vehicle, including fuel, maintenance, insurance, and depreciation.

Snow-Day

Typically refers to a day on which work or school is canceled due to excessive snowfall or hazardous weather conditions.

Activity Variance

The discrepancy between budgeted activity levels and actual activity levels, impacting the allocation of overhead costs.