A Simple Random Sample of Ten Firms Was Asked How

question 65

Essay

A simple random sample of ten firms was asked how much money (in thousands of dollars) they spent on employee training programs this year and how much they plan to spend on these programs next year. The data are shown below. $$\begin{array} { l r r r r r r r r r r } \text { Firm } & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \\\text { This year } & 25 & 31 & 12 & 15 & 21 & 36 & 18 & 5 & 9 & 17 \\\text { Next year } & 21 & 30 & 18 & 20 & 22 & 36 & 20 & 10 & 8 & 15\end{array}$$ Assume that the populations of amount spent on employee training programs are normally distributed.
a. Estimate with 95% confidence the mean difference.
b. Briefly explain what the interval estimate in part a. tells you.

Analyze the effect of average total cost changes on profit.

Determine the firm's optimal production level in a competitive market setting.

Calculate economic profit under different market conditions.

Identify the firm's short-run supply curve in a competitive market.

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Definitions:

Process Costing

A costing method used in manufacturing where costs are assigned to products based on the average cost of production steps or processes.

Conversion Costs

The aggregate cost of direct labor and the overheads in manufacturing necessary for turning raw materials into final goods.

Cutting Department

A section within a manufacturing facility where materials are cut to size or shape before proceeding to further stages of production.

Equivalent Unit

An equivalent unit is a measure used in cost accounting to quantify the amount of materials or labor in terms of finished goods units.