Instruction 15-4
One Criterion Used to Evaluate Employees in the Assembly

question 81

Multiple Choice

Instruction 15-4
One criterion used to evaluate employees in the assembly section of a large factory is the number of defective pieces per 1,000 parts produced.The quality control department wants to find out whether there is a relationship between years of experience and defect rate.Since the job is repetitious,after the initial training period any improvement due to a learning effect might be offset by a loss of motivation.A defect rate is calculated for each worker in a yearly evaluation.The results for 100 workers are given in the table below.
Years Since Training Period
$$\begin{array} { | r | l | c | c | c | } \hline & & < \mathbf { 1 } \text { Year } & \text { 1 - 4 Years } & \text { 5 - 9 Years } \\\hline & \text { High } & 6 & 9 & 9 \\\hline \text { Defect Rate: } & { \text { Average } } & 9 & 19 & 23 \\\hline & \text { Low } & 7 & 8 & 10 \\\hline\end{array}$$
-Referring to Instruction 15-4,find the rejection region necessary for testing at the 0.05 level of significance whether there is a relationship between defect rate and years of experience.

• A)Reject H₀ if ?² > 11.143.
• B)Reject H₀ if ?² > 16.919.
• C)Reject H₀ if ?² > 15.507.
• D)Reject H₀ if ?² > 9.488.

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Definitions:

Allowance Method

An accounting technique used to account for bad debts, which estimates uncollectible accounts receivable and creates a provision for them.

Accounts Receivable

Financial dues from customers to an organization for products or services that have been dispensed but not reimbursed.

Allowance for Doubtful Accounts

A contra asset account used to estimate the portion of a company's receivables that may not be collectible.

Bad Debts Expense

This is an expense reported on the income statement, reflecting the cost of credit sales that a company does not expect to collect.