A Random Sample of 30 Executives from Companies with Assets

question 80

Multiple Choice

A random sample of 30 executives from companies with assets over $1 million was selected and asked for their annual income and level of education. The ANOVA comparing the average income among three levels of education rejected the null hypothesis. The Mean Square Error (MSE) was 243.7. The following table summarized the results: When comparing the mean annual incomes for executives with a high school education or less and those with an undergraduate degree, the 95% confidence interval shows an interval of 11.7 to 42.7 for the difference. This result indicates that __________________.

• A)There is no significant difference between the two incomes.
• B)The interval contains a difference of zero.
• C)Executives with an undergraduate degree earn significantly more than executives with a high school education or less.
• D)Executives with an undergraduate degree earn significantly less than executives with a high school education or less.

---

Definitions:

Variable Cost

Costs that change in proportion to the level of production or sales volume, such as raw materials and direct labor.

Variable Cost of Goods Sold

These are costs that fluctuate in direct proportion to changes in the level of production or sales volume, such as raw materials and direct labor.

Fixed Cost of Goods Sold

A portion of the cost of goods sold that remains constant, regardless of the level of production or sales.

Contribution Margin Format

A costing format that highlights the contribution margin, which is sales revenue minus variable costs, used in management accounting.