A System Consists of Two Components, Each of Which Must

question 7

Multiple Choice

A system consists of two components, each of which must activate if the system is to activate. One component has a reliability of .99. The other has a reliability of .95. What is the overall system reliability?

• A) 0.99
• B) 0.95
• C) 0.94
• D) 0.9
• E) Cannot be determined with this information.

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Definitions:

Fixed Overhead Budget Variance

The difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs.

Actual Fixed Overhead Costs

Actual fixed overhead costs are the incurred expenses that do not vary with the level of production or sales, such as rent and salary of permanent staff.

Budgeted Fixed Manufacturing Overhead

The estimated total fixed costs required for the manufacturing process, planned in advance for a specific period.

Materials Price Variance

The difference between the actual cost of materials used in production and the budgeted or standard cost, indicating how effectively a company controls its material costs.