TABLE 4-5 In a Meat Packaging Plant, Machine a Accounts for 60

question 162

Short Answer

TABLE 4-5
In a meat packaging plant, Machine A accounts for 60% of the plant's output, while Machine B accounts for 40% of the plant's output. In total, 4% of the packages are improperly sealed. Also, 3% of the packages are from Machine A and are improperly sealed.
-Referring to Table 4-5, if a package selected at random is improperly sealed, the probability that it came from machine A is ________.

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Definitions:

Income Statement Method

A technique used to create a company's income statement to report earnings and financial performance.

Income Statement Approach

A method that estimates the amount of Bad Debts Expense that will result based on a percentage of net credit sales for the period. The amount of the expected bad debt is added to the existing balance of Allowance for Doubtful Accounts.

Gross Accounts Receivable

The total amount owed to a company by its customers for goods or services delivered, before deducting any allowance for doubtful accounts.

Contra-Asset Account

An asset account where its balance is a reduction of another asset account, typically used for accumulated depreciation.