A Machine Is Set to Pump Cleanser into a Process

question 118

Multiple Choice

A machine is set to pump cleanser into a process at the rate of 10 gallons per minute. Upon inspection, it is learned that the machine actually pumps cleanser at a rate described by the
Uniform distribution over the interval 10.0 to 13.0 gallons per minute. Would you expect the
Machine to pump more than 12.85 gallons per minute?

• A)Yes, since .95 is a high probability.
• B)No, since .95 is a high probability.
• C)Yes, since .05 is a high probability.
• D)No, since .05 is a low probability.

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Definitions:

Underapplied

A situation where the allocated costs of production are less than the actual costs incurred, leading to a discrepancy in accounting records.

Overapplied

A situation where the allocated manufacturing overhead costs exceed the actual manufacturing overhead costs incurred.

Denominator Activity

The total base activity used to allocate overhead costs in cost accounting, such as total direct labor hours or machine hours available.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, used in allocating manufacturing overhead.