The Average Life Expectancy of Tires Produced by the Whitney $\mu$

question 143

Multiple Choice

The average life expectancy of tires produced by the Whitney Tire Company has been 40,000 miles. Management believes that due to a new production process, the life expectancy of their tires has increased. In order to test the validity of their belief, the correct set of hypotheses is

• A)H₀: \(\mu\) < 40,000 H_a: \(\mu\) 40,000
• B)H₀: \(\mu\) 40,000 H_a: \(\mu\) > 40,000
• C)H₀: \(\mu\) > 40,000 H_a: \(\mu\) 40,000
• D)H₀: \(\mu\) 40,000 H_a: \(\mu\) < 40,000

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Definitions:

Ending Inventory

Ending inventory is the total value of inventory still on hand at the end of an accounting period, calculated by adding new purchases to beginning inventory and subtracting the goods sold.

LIFO

Last In, First Out (LIFO) is an inventory valuation method which assumes that the most recently produced items are the first to be sold.

Units

In accounting and finance, refers to a measure of quantity or volume of production or inventory.

Specific Identification

An inventory costing method in which costs are assigned to individual items or batches of items, not to inventory as a whole.