A Random Sample of 40 Companies with Assets Over $10

question 5

Multiple Choice

A random sample of 40 companies with assets over $10 million was selected and asked for their annual computer technology expense and industry. The ANOVA comparing the average computer technology expense among three industries rejected the null hypothesis. The Mean Square Error (MSE) was 195. The following table summarized the results: Based on the comparison between the mean annual computer technology expense for companies in the Education and Tax services industries,

• A) A confidence interval shows that the mean annual computer technology expenses are not significantly different.
• B) The ANOVA results show that the mean annual computer technology expenses are significantly different.
• C) A confidence interval shows that the mean annual computer technology expenses are significantly different.
• D) The ANOVA results show that the mean annual computer technology expenses are not significantly different.

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Definitions:

Underapplied Overhead

Occurs when the allocated or applied overhead costs in the production process are less than the actual overhead costs incurred.

Manufacturing Overhead Account

An accounting category that records the indirect costs associated with producing goods, such as utilities for the factory or salaries for the maintenance staff.

Overapplied Manufacturing Overhead

A situation where the amount of manufacturing overhead allocated to products is more than the actual overhead incurred.

Work in Process

Inventory that includes all materials, labor, and overhead costs incurred for products that are in the production process but not yet completed.