How Many Observations Should Be Made If the Analyst Wants

question 15

Multiple Choice

How many observations should be made if the analyst wants to be 99.74 percent confident that the maximum error in the observed time is two seconds? Assume that the standard deviation of task times is 4 seconds.

• A) 5
• B) 6
• C) 25
• D) 36
• E) 49

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Definitions:

Overhead Costs

Expenses required to run a business that are not directly related to the production of goods or services, such as rent, utilities, and administrative salaries.

Direct Labor Cost

The expense associated with the work performed by employees directly involved in the manufacturing process of products.

Manufacturing Overhead

All manufacturing costs that are not directly associated with the production of goods, including costs related to indirect labor, materials, and facility.

Direct Materials Costs

The expense incurred for raw materials that are directly traceable and allocable to a finished product.