A Manufacturer of Automobile Transmissions Uses Three Different Processes

question 77

Multiple Choice

A manufacturer of automobile transmissions uses three different processes. The management ordered a study of the production costs to see if there is a difference among the three processes. A summary of the findings is shown below. What is the critical value of F at the 5% level of significance?

• A) 19.45
• B) 3.00
• C) 3.35
• D) 3.39

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Definitions:

Variable Cost

Costs that change in proportion to the good or service that a business produces.

Inventory

The total amount of goods and materials held by a company for the purpose of resale or production.

Default Percent

The percentage of loans or debts that are not paid back in accordance with the terms agreed upon by borrowers and lenders.

Variable Cost

A cost that varies with the level of output or sales, such as materials and labor costs.