Bill Pope Has Developed a New Device That Is So

question 30

Essay

Bill Pope has developed a new device that is so exciting he is considering quitting his job in order to produce and market it on a large-scale basis.Bill will rent a garage for $300 per month for production purposes.Utilities will cost $40 per month.Bill has already taken an industrial design course at the local community college to help prepare for this venture.The course cost $300.Bill will rent production equipment at a monthly cost of $800.He estimates the material cost per unit will be $5,and the labor cost will be $3.He will hire workers and spend his time promoting the product.To do this he will quit his job which pays $3,000 per month.Advertising and promotion will cost $900 per month.
Required:
Complete the chart below by placing an "X" under each heading that helps to identify the cost involved.There can be "Xs" placed under more than one heading for a single cost,e.g. ,a cost might be a sunk cost,an overhead cost and a product cost;there would be an "X" placed under each of these headings opposite the cost. * Between the alternatives of going into business to make the device or not going into business to make the device.

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Definitions:

Critical Value

A threshold in hypothesis testing that defines the boundary of the region where the null hypothesis is rejected.

Minimum Value

The smallest number in a data set.

Significance

Significance refers to the measure of whether the results of a study or experiment are likely not due to chance, as determined by a set threshold of probability (p-value).

Alpha (α)

The threshold of significance in a statistical test; the probability of rejecting the null hypothesis when it is true, often set at 0.05 or 5%.