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The Owner of Kat Motel Wants to Develop a Time

question 7

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The owner of Kat Motel wants to develop a time standard for the task of cleaning a cat cage. In a preliminary study, she observed one of her workers perform this task six times, with the following results:  Observation 123456 Time (seconds)  998790819390\begin{array} { l r r r r r r } \text { Observation } & 1 & 2 & 3 & 4 & 5 & 6 \\\hline \text { Time (seconds) } & 99 & 87 & 90 & 81 & 93 & 90\end{array} How many observations should be made if she wants to be 95.44 percent confident that the maximum error in the observed time is two seconds? Assume that the standard deviation of the task time is six seconds.

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Definitions:

Net Operating Income

The profit generated from normal business operations, excluding extraordinary items and expenses like taxes.

Variable Costing

A pricing approach that incorporates just the variable production expenses—such as direct materials, direct labor, and variable manufacturing overhead—into the unit cost of a product.

Fixed Manufacturing Overhead

These are the manufacturing costs that do not change with the level of production, such as rent, salaries, and insurance.

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials to be consumed in the production process.

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