Use the Following Information to Answer Questions

question 22

Multiple Choice

Use the following information to answer questions . Suppose that a recent poll of American households about
car ownership found that for households with a car, 39% owned a sedan, 33% owned a van, and 7% owned a sports
car. Suppose that three households are selected randomly and with replacement.
-What is the probability that none of the three randomly selected households own a van? (Round to the nearest thousandth)

• A)0.699
• B)0.060
• C)0.036
• D)0.301

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Definitions:

Variable Overhead

The costs that fluctuate with the level of production output and may include expenses such as utilities and indirect materials.

Direct Materials

Raw materials that can be directly attributed to the manufacturing of a product.

Direct Labor-Hours

Overall hours employees spend directly involved in the fabricating process.

Variable Overhead

Overhead costs that fluctuate with the level of production activity, such as utilities or indirect materials.