State University Uses Thousands of Fluorescent Light Bulbs Each Year $\bar { x }$

question 71

Essay

State University uses thousands of fluorescent light bulbs each year. The brand of bulb it currently uses has a mean life of 800 hours. A competitor claims that its bulbs, which cost the same as the brand the university currently uses, have a mean life of more than 800 hours. The university has decided to purchase the new brand if, when tested, the evidence supports the manufacturer's claim at the .05 significance level. Suppose 121 bulbs were tested with the following results: $\bar { x }$ = 827.5 hours, s = 110 hours. Conduct the test using α = .05.

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Definitions:

Inventory Formula

The equation used to calculate the value of a company's inventory, commonly stated as Beginning Inventory + Purchases - Cost of Goods Sold = Ending Inventory.

Physical Flow

The actual movement of goods or materials through a manufacturing process, from receipt of raw materials to delivery of finished products.

Weighted Average Method

An inventory valuation method that applies a weighted average cost to the goods available for sale, to calculate cost of goods sold and ending inventory.

Responsibility Centre

A management accounting tool in which parts of an organization are allocated responsibility for controlling costs, revenues, or investments.