The Employees at the East Vancouver Office of a Multinational

question 82

Multiple Choice

The employees at the East Vancouver office of a multinational company are demanding higher salaries than those offered at the company office located in Oshawa Ontario. Their justification for the pay difference is that the difference between the average price of single-family houses in East Vancouver and that in Oshawa is more than $60,000. Before making a decision, the company management wants to study the difference in the prices of single-family houses for sale at the two locations.
The results of their search of recent house sales are as follows (in $000, rounded to the nearest
Thousand) : Assuming that the population distributions are approximately normal, can we conclude at the 0.05 significance level that the difference between the two population means is greater than $60,000?
If we let East Vancouver be population 1 and Oshawa be population 2, what is the null hypothesis?

• A) µ1 = µ2, or µd = 0
• B) µ1 ≠ µ2, or µd ≠ 0
• C) µ1 - µ2 ≤ 60
• D) µ1 - µ2 > 60
• E) None of these statements are correct

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Definitions:

Selling and Admin. Expense

Costs that are not directly tied to the production of goods or services but are necessary for selling products and managing the business.

Variable Expense

Costs that vary directly with the level of production or sales volume, such as raw materials and commission fees.

Finished Goods Inventory

The inventory of finished goods available for sale but still awaiting purchase by consumers.

Direct Labor Hours

The collective amount of time spent by employees actively engaged in the production process.