A Researcher Is Investigating Which of Two Newly Developed Automobile $95 \%$

question 2

Multiple Choice

A researcher is investigating which of two newly developed automobile engine oils is better at prolonging the life of an engine. Since there are a variety of automobile engines, 20 different engine types were randomly selected and were tested using each of the two engine oils. The number of hours of continuous use before engine breakdown was recorded for each engine oil. Suppose the following $95 \%$ confidence interval for $\mu _ { \mathrm { A } } - \mu _ { \mathrm { B } }$ was calculated: $( 100,2500 )$ . Which of the following inferences is correct?

• A) We are \(95 \%\) confident that no significant differences exists in the mean number of hours of continuous use before breakdown of engines using oils A and B.
• B) We are \(95 \%\) confident that an engine using oil A has a higher mean number of hours of continuous use before breakdown than does an engine using oil B.
• C) We are \(95 \%\) confident that the mean number of hours of continuous use of an engine using oil \(\mathrm { A }\) is between 100 and 2500 hours.
• D) We are \(95 \%\) confident that an engine using oil B has a higher mean number of hours of continuous use before breakdown than does an engine using oil A.

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Definitions:

Variable Manufacturing Overhead

Manufacturing costs that vary in direct proportion to changes in production volume, such as utilities and indirect materials.

Machine-hours

A measure of production output based on the number of hours machines are operated within a given period.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard variable overhead assigned to the production based on the actual activity levels.

Total Variable Overhead Spending Variance

The overall difference between actual and budgeted variable overhead costs based on the changes in the level of activity.