I a Continuity Correction Compensates for Estimating a Discrete Distribution

question 42

Multiple Choice

i. A continuity correction compensates for estimating a discrete distribution with a continuous distribution. ii. The binomial can be used to approximate the normal distribution for small sized samples.
iii. The binomial may be used to approximate the normal distribution when the probability, p, remains the same from trial to trial.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) is a correct statement but not (ii) or (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (i) and (ii) are correct statements but not (iii).
• E) (i), (ii), and (iii) are all false statements.

---

Definitions:

Direct Labor Efficiency Variance

The difference between the budgeted amount of direct labor required to produce an output and the actual direct labor used.

Favorable

A term used in budgeting and finance to indicate results that are better than expected, such as lower costs or higher revenues.

Unfavorable

A term used to describe outcomes or variances that negatively impact financial performance or expectations.

Unfavorable Variances

Occurrences when actual costs exceed budgeted or expected costs, indicating a potential need for management action to address inefficiencies.