A Firm Is Concerned with Variability in Hourly Output at Several

question 55

Multiple Choice

A firm is concerned with variability in hourly output at several factories and shifts. Here are the results of an ANOVA using output per hour as the dependent variable (some information is missing) . $$\begin{array} { | l | c | c | c | c | c | } \hline \text { Source } & \text { Sum of Squares } & d f & \text { Mean Square } & \text { FRatio } & P \text {-value } \\\hline \text { Factory } & 19012.5 & 1 & 19012.5 & 26.427 & 0.000 \\\hline \text { Shift } & 258.333 & 2 & 129.167 & 0.180 & 0.838 \\\hline \text { Factory* Shift } & 80908.333 & 2 & 40454.167 & 56.230 & \\\hline \text { Error } & 8633.333 & 12 & 719.444 & & \\\hline \text { Total } & 108812.5 & 17 & 6400.735 & & \\\hline\end{array}$$ The p-value for the interaction effect is going to be:

• A)very small (near 0).
• B)very large (near 1).
• C)impossible to know-could be either large or small.

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Definitions:

Net Operating Income

A financial term representing the profit made from a company’s operations, after subtracting operating expenses from operating income.

Absorption Costing

The product cost determination method under this accounting strategy includes the expenses for direct materials, direct labor, and all manufacturing overhead, whether it is variable or fixed.

Gross Margin

A company's total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage.

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and overhead) in product costs and treats fixed manufacturing overhead as an expense of the period.