Employment Program a City Council Must Decide Whether to Fund

question 13

Essay

Employment program A city council must decide whether to fund a new
"welfare-to-work" program to assist long-time unemployed people in finding jobs. This
program would help clients fill out job applications and give them advice about dealing with job interviews. A six-month trial has just ended. At the start of this trial a number of unemployed residents were randomly divided into two groups; one group went through the help program and the other group did not. Data about employment at the end of this
trial are shown in the table. Should the city council fund this program? Test an appropriate hypothesis and state your conclusion. $\begin{array}{|c|c|c|}\hline&{\text { Current job status }} \\\hline & \text { Employed } & \text { Unemployed } \\\hline \begin{array}{c}\text { Group 1 } \\\text { (Help program) }\end{array} & 20 & 34 \\\hline \begin{array}{c}\text { Group 2 } \\\text { (No help) }\end{array} & 13 & 33 \\\hline\end{array}$

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Definitions:

Manufacturing Overhead

All indirect costs associated with the manufacturing process, such as maintenance, utilities, and quality control.

Machine-Hours

A measure of production time that tracks the number of hours a machine is operated.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual jobs, calculated at the beginning of a period by dividing the estimated total overhead costs by an allocation base such as estimated total units in the allocation base.

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that varies directly with production volume, such as utilities and raw materials.