A Computer Manufacturer Believes That the Proportion of Hardware Malfunctions

question 125

Essay

A computer manufacturer believes that the proportion of hardware malfunctions is different in humid climates than in dry climates. To test this claim, the manufacturer takes a random sample of 400 machines sold in Florida (humid) and 400 machines sold in Arizona (dry). The manufacturer finds that 44 of the machines in Florida and 24 of the machines in Arizona had hardware malfunctions.
A) Specify the competing hypotheses to test the manufacturer's claim.
B) Calculate the value of the relevant test statistic.
C) Compute the p-value. Does the evidence support the computer manufacturer's claim at the 10% significance level?

• A) Specify the competing hypotheses to test the manufacturer's claim.
• B) Calculate the value of the relevant test statistic.
• C) Compute the p-value. Does the evidence support the computer manufacturer's claim at the 10% significance level?

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Definitions:

Manufacturing Overhead

All indirect costs associated with manufacturing a product, which includes costs not directly tied to the product such as maintenance, utilities, and supervisor salaries.

Underapplied Manufacturing Overhead

Refers to the situation when the allocated manufacturing overhead costs are less than the actual overhead costs incurred.

Manufacturing Overhead Control

A way of monitoring and managing the costs associated with the indirect elements of production, such as utilities, maintenance, and factory supplies.

Overhead Costs

All costs on the income statement except for direct labor, direct materials, and direct expenses, covering expenses like rent, utilities, and insurance.