A Machine That Is Programmed to Package 1

question 91

Multiple Choice

A machine that is programmed to package 1.20 pounds of cereal is being tested for its accuracy in a sample of 36 cereal boxes, the sample mean filling weight is calculated as 1.22 pounds. The population standard deviation is known to be 0.06 pounds. Which of the following conclusions is correct?

• A) The machine is operating improperly because the target is below the lower limit.
• B) The machine is operating properly because the interval contains the target.
• C) The machine is operating improperly because the target is above the upper limit.
• D) There is not enough information to make a conclusion.

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Definitions:

Actual Price Per Pound

The real cost of a commodity or material expressed on a per pound basis.

Standard Price Per Pound

A predetermined cost set for a pound of material, used in budgeting and costing to assess efficiency and variances in purchasing or production.

Total Direct Materials Cost Variance

The difference between the actual cost of direct materials used in production and the expected (or standard) cost.

Total Variable Overhead Variance

The difference between the actual variable overhead costs incurred and the expected (or budgeted) variable overhead costs.