Exhibit 11-8
an Insurance Company Selected Samples of Clients Under

question 7

Multiple Choice

Exhibit 11-8
An insurance company selected samples of clients under 18 years of age and over 18 and recorded the number of accidents they had in the previous year. The results are shown below.
$\begin{array}{ll}\text { Under Age of 18}&\text { Over Age of 18}\\\mathrm{n}_{1}=500 & \mathrm{n}_{2}=600 \\\text { Number of accidents }=180 & \text { Number of accidents }=150\end{array}$
We are interested in determining if the accident proportions differ between the two age groups.
-Refer to Exhibit 11-8. The pooled proportion is

• A) 0.305
• B) 0.300
• C) 0.027
• D) 0.450

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Definitions:

Fixed Expenses

Costs that do not change in total regardless of changes in the amount of goods or services produced or sold, such as rent, salaries, or insurance premiums.

Markup Percentage

A measure of the difference between the cost of a product and its selling price, expressed as a percentage of the cost.

Product Cost

The total costs incurred in the production of a product, typically including direct materials, direct labor, and manufacturing overhead.

Target Cost

The desired cost of a product that is determined by subtracting a desired profit margin from a competitive market price.