A Car Wash Is Trying to Determine How Long the Average

question 113

Multiple Choice

A car wash is trying to determine how long the average line for a wash will be. The probability distributions that describe arrival and service times are unknown. If 10 cars arrive each hour and must wait 12 minutes in the line, how long will the line be, on average?

• A) 120 cars
• B) 2 cars
• C) 1 car
• D) 0.83 cars
• E) 5 cars

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Definitions:

Allowance for Doubtful Accounts

This is a contra-asset account used to estimate the portion of accounts receivable that may not be collectible.

Accounts Receivable

Funds that customers owe a company for goods or services already provided but not yet compensated for.

Allowance Method

An accounting technique used to estimate and account for a firm's potentially uncollectible accounts receivable.

Allowance for Doubtful Accounts

An estimation of the amount of accounts receivable that may not be collectible.