Provide an Appropriate Response

question 43

Essay

Provide an appropriate response.
-You are late for work. You have two options for getting to work. You may take the bus
which takes on average 40 minutes with a standard deviation of 12 minutes. Or you can
cycle which takes on average 50 minutes with a standard deviation of 2 minutes. Compare
these two distributions.
You leave your house at 8.20 am and are supposed to start work at 9.00 am.
Which option would you choose if you will be fired if you are even a few minutes late?
Which option would you choose if you know that up to 15 minutes late is OK but after that
there is trouble? Explain your thinking.

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Definitions:

FIFO Method

First-In, First-Out, an inventory valuation method where the costs of the oldest inventory items are recorded as sold first.

Conversion Activity

Processes that transform raw materials into finished products, including manufacturing, assembling, and packaging operations.

Weighted Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all units available for sale.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the costs required to convert raw materials into finished goods.