A Company Has 2 Machines That Produce Widgets

question 72

Multiple Choice

A company has 2 machines that produce widgets.An older machine produces 23% defective
Widgets, while the new machine produces only 8% defective widgets.In addition, the new
Machine produces 3 times as many widgets as the older machine does.Given a randomly chosen
Widget was tested and found to be defective, what is the probability it was produced by the new
Machine?

• A) 0.08
• B) 0.15
• C) 0.489
• D) 0.511

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Definitions:

Manufacturing Overhead

All manufacturing costs that are not directly attributable to a product, including indirect materials, labor, and other expenses.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the production of goods.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated before the period begins based on estimated costs and activities.

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that vary with the level of production, such as utilities and materials.