The Owner of a Car Wash Wants to See If

question 11

Multiple Choice

The owner of a car wash wants to see if the arrival rate of cars follows a Poisson distribution. In order to test the assumption of a Poisson distribution, a random sample of 150 ten-minute intervals was taken. You are given the following observed frequencies: ​ At the .05 level of significance, the conclusion of the test is that the

• A) null hypothesis cannot be rejected.
• B) arrival of cars does not follow a Poisson distribution.
• C) 10-minute intervals follow a Poisson distribution.
• D) arrival of cars has no distribution.

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Definitions:

Total Labor Variance

The difference between the actual cost of labor and the budgeted or standard cost of labor over a period.

Total Overhead Variance

The difference between actual overhead costs incurred and overhead costs allocated to production, based on standard rates, during a specific period.

Direct Labor Price Variance

A measure of the difference between the actual cost of direct labor and the standard cost of direct labor multiplied by the actual hours worked.

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing a product or providing a service, often used to allocate labor costs to products or services.