Motorcycle Repair Cost Motorcycle Insurance Appraisers Examine Motorcycles That Have

question 39

Essay

Motorcycle Repair Cost Motorcycle insurance appraisers examine motorcycles that have been involved in accidental collisions and estimate the cost of repairs. An insurance executive claims that there are significant differences in the estimates from different appraisers. To support his claim he takes a random sample of six motorcycles that have recently been damaged in accidents. Three appraisers then estimate the repair costs of all six motorcycles. The data are shown below.
  Estimated Repair Cost
Motorcycles Appraiser 1 Appraiser 2 Appraiser 3
1   650   600   750
2   930   910 1010
3   440   450   500
4   750   710   810
5 1190 1050 1250
6 1560 1270 1450
{Motorcycle Repair Cost Narrative} Set up the ANOVA Table. Use a = 0.05 to determine the critical values.

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Definitions:

Underapplied

A situation in cost accounting where the allocated indirect costs are less than the actual indirect costs incurred, resulting in a discrepancy.

Depreciation Expense

It represents the allocation of the cost of tangible assets over its useful life, reflecting the use and wear and tear of the asset.

Factory Equipment

This term describes the machinery and tools used in a manufacturing process to produce goods.

Overhead Cost

The ongoing expense of operating a business that is not directly attributed to a specific product or service, such as rent and utilities.