Soap Company Manufactures Soap X and Soap Y and Can

question 23

Multiple Choice

Soap Company manufactures Soap X and Soap Y and can sell all it can make of either.Hours available to produce the products is the constrained resources.Based on the following data, if Soap could reduce the processing time for X by 10%, which of the following statements is true? $$\begin{array} { l c c } & \text { X } & \text { Y } \\\hline \text { Sales Price } & \$ 20 & \$ 25 \\\text { Variable Cost } & 14 & 15 \\\hline \text { Hours needed to process } & 3 & 5\end{array}$$

• A) It would take 162 minutes to process one unit of X.
• B) There would be no difference in the contribution margin per hour as compared to it before the processing time reduction.
• C) The contribution margin per hour for X would be $2.
• D) Soap Y would still be the most profitable.

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Definitions:

Rejection Region

The range of values for which the null hypothesis is considered not probable and is therefore rejected in a hypothesis test.

Sign Test

A nonparametric test used to determine if there is a difference between matched or paired observations.

Distribution

Refers to the way in which data points are spread out across the range of possible values in a dataset.

Test Statistic

A computed value used to decide whether to reject the null hypothesis in statistical hypothesis testing.