Two Accounting Professors Decided to Compare the Variation of Their

question 46

Multiple Choice

Two accounting professors decided to compare the variation of their grading procedures. To accomplish this they each graded the same 10 exams with the following results: At the 1% level of significance, what is the decision?

• A) Reject the null hypothesis and conclude the variance is different.
• B) Fail to reject the null hypothesis and conclude the variance is different.
• C) Reject the null hypothesis and conclude the variance is the same.
• D) Fail to reject the null hypothesis and conclude the variance is the same.
• E) None of these statements are true

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Definitions:

Overhead

The total cost of running a business that cannot be directly attributed to the production of goods or services, similar to factory overhead but can apply to non-manufacturing costs.

Overhead Allocation Base

A measure or activity, such as direct labor hours or machine hours, used to assign overhead costs to products or services.

Direct Labor Hours

The total hours worked directly on a product or service by employees in the production process.

Overhead Rate

A measure used to allocate overhead costs to produced goods, calculated by dividing total overheads by an allocation base, such as labor hours.