A Manufacturer of Tennis Balls Uses a Production Process That

question 157

Multiple Choice

A manufacturer of tennis balls uses a production process that produces 5% defective balls. A quality inspector takes samples of a week's output, with replacement. Using the cumulative binomial probability table available in your text, which of the following probabilities can the inspector determine?

• A) If five units are inspected, the probability of zero units being defective is 0.774.
• B) If 10 units are inspected, the probability of 2 units being defective is 0.374.
• C) If 15 units are inspected, the probability of 4 units being defective is 0.999.
• D) If 20 units are inspected, the probability of 6 units being defective is 0.0569.

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Definitions:

Variable Cost

A cost that varies, in total, in direct proportion to changes in the level of activity. A variable cost is constant per unit.

Fixed Cost

A cost that remains constant, in total, regardless of changes in the level of activity within the relevant range. If a fixed cost is expressed on a per unit basis, it varies inversely with the level of activity.

Planning Budget

A financial plan for a future period, outlining an organization's revenue and expenditures.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels.