A 95% Confidence Interval Estimate of the Population Mean μ

question 1

Multiple Choice

A 95% confidence interval estimate of the population mean μ can be interpreted to mean that:

• A) if we repeatedly draw samples of the same size from the same population, 95% of the values of the sample means will result in a confidence interval that includes the population mean μ.
• B) there is a 95% probability that the population mean μ will lie between the lower interval limit and the upper interval limit.
• C) we are 95% confident that we have selected a sample whose range of values does not contain the population mean μ.
• D) we are 95% confident that 5% of the values of the sample means will result in a confidence interval that includes the population mean μ.

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders, calculated at the beginning of an accounting period.

Overhead Efficiency

The measurement of how effectively a company uses its overhead costs in the production of goods or services.

Predetermined Overhead Rate

This is a rate used to allocate manufacturing overhead costs to products or job orders, estimated by dividing total estimated overhead costs by an allocation base, such as direct labor hours or machine hours.

Variable Manufacturing Overhead

Costs that vary with the level of production output but are indirect in nature, such as indirect materials and utilities.