Johnson Enterprises Sells No-Spill Syrup in Bottles

question 72

Short Answer

Johnson Enterprises sells no-spill syrup in bottles. Management is evaluating four different machines with standard deviations of .006, .01, .022, and .04 ounces for Machines A, B, C, and D, respectively. The specification limits 11.95 and 12.05 ounces. Which machines should receive more detailed evaluation, i.e. which are statistically "capable?"

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Definitions:

Funds-Flow Statement

A financial statement that shows the inflows and outflows of funds from operations, financing, and investing activities, illuminating how a company's financial position changes over time.

Exchange Gains/Losses

The profit or loss resulting from foreign currency transactions due to changes in exchange rates.

Functional Currency

The currency of the primary economic environment in which an entity operates and carries out its financial transactions.

Property, Plant, And Equipment

Long-term assets owned by a business for the purpose of production, supply, rental, or administrative use, not intended for sale during the normal course of business.