Find and Interpret the Area Under a Normal Curve

question 77

Multiple Choice

Find and Interpret the Area under a Normal Curve
-A new phone system was installed last year to help reduce the expense of personal calls that were being made by employees. Before the new system was installed, the amount being spent on personal calls follows a normal distribution with an average of $700 per month and a standard deviation of $50 per month. Refer to such expenses as PCE s (personal call expenses) . Find the probability that a randomly selected month had a PCE that falls below $550.

• A) 0.0013
• B) 0.7857
• C) 0.2143
• D) 0.9987

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Definitions:

Current Replacement Cost

The amount of money required to replace an asset at its current market value.

Market

A place or mechanism through which goods, services, or financial instruments are traded between buyers and sellers.

Specific Identification Method

An inventory valuation method in which costs are assigned to individual items, used in situations where each item is distinguishable or significantly different from others.

Costing Inventories

The process of determining the value of inventory, including the costs associated with acquiring or producing the goods.