Two Hundred Simulation Runs Were Completed Using the Probability of a Machine

question 66

Multiple Choice

Two hundred simulation runs were completed using the probability of a machine breakdown from the table below. The average number of breakdowns from the simulation trials was 1.93 with a standard deviation of 0.20.
$$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { No. of } \\\text { breakdowns } \\\text { per week }\end{array} & \text { Probability } & \begin{array} { c } \text { Cumulative } \\\text { probability }\end{array} \\\hline 0 & .10 & .10 \\\hline 1 & .25 & .35 \\\hline 2 & .36 & .71 \\\hline 3 & .22 & .93 \\\hline 4 & .07 & 1.00 \\\hline\end{array}$$
-What is the probability that there are more than 3 breakdowns?

• A) .07
• B).10
• C) .22
• D) .25

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Definitions:

Absorption Costing

A bookkeeping approach that encompasses the total expenses of production, including direct materials, direct labor, along with both variable and fixed overhead costs, into the pricing of a product.

Unit Product Cost

The total cost (both fixed and variable) to produce a unit of product, used for setting prices and analyzing efficiency.

Absorption Costing

An accounting method where all manufacturing costs, including both variable and fixed costs, are allocated to produced units, thus ‘absorbing’ them.

Unit Product Cost

The total cost associated with producing a single unit of a product, calculated by dividing the total production costs by the number of units produced.