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Answer the Following Questions Using the Information Below

question 62

Multiple Choice

Answer the following questions using the information below:
LaCrosse Products has a budget of $900,000 in 2015 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $80,000 in variable costs. The new method will require $40,000 in training costs and $100,000 in annual equipment costs. Management is willing to adjust the budget for an amount up to the cost of the new equipment. The budgeted production level is 150,000 units.
Appraisal costs for the year are budgeted at $600,000. The new prevention procedures will save appraisal costs of $50,000. Internal failure costs average $15 per failed unit of finished goods. The internal failure rate is expected to be 3% of all completed items. The proposed changes will cut the internal failure rate by one-third. Internal failure units are destroyed. External failure costs average $54 per failed unit. The company's average external failures average 3% of units sold. The new proposal will reduce this rate by 50%. Assume all units produced are sold and there are no ending inventories.
-How much do external failure costs change if all changes are as anticipated with the new prevention procedures? Assume all units produced are sold and there are no ending inventories.

Identify the statistical procedure to use based on conditions related to expected frequencies.

Understand the assumption of independence in data for chi-square tests.

Assess the impact of expected frequency size on the ability of chi-square tests to approximate distributions.

Recognize the implications of having observations that are not independent for chi-square analysis.

Definitions:

Proximal Outcomes

Immediate results or effects that are closely connected to an action or intervention, often measured in the short term.

Anticipatory Socialization

The process through which individuals learn and adopt the norms, values, behaviors, and social skills necessary for future roles and social memberships.

Conformity

Adjusting one's behavior or thinking to match those of others or adhere to group norms.

Socialization Process

The process through which individuals learn and adopt the values, norms, and behaviors that are necessary for participating within a society or specific group.