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Kemper Company Manufactures and Sells Widgets

question 17

Essay

Kemper Company manufactures and sells widgets.Each widget costs $120 and sells for $200.Each widget carries a warranty that provides for free replacement if it fails for any reason during the next 36 months.In the past,4 percent of the widgets have had to be replaced under the warranty.During May,Kemper sold 4,000 widgets and replaced 300 under warranty.Calculate the product warranty expense for the month.Show your computation.


Definitions:

Large-Sample Method

Statistical methods that rely on the theory of large numbers, allowing for approximation techniques when the sample size is sufficiently large.

Confidence Interval

A statistical range, based on sample data, within which a population parameter is estimated to lie with a certain level of confidence.

Number of Successes

In statistical experiments, the count of instances that meet a defined criterion for success.

Standard Error

A measure of the variability or dispersion of a sampling distribution, often used as an estimate of the accuracy of a sample mean.

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