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BartSMP [9]
3 years ago
11

A manufacturing process produces integrated circuit chips. Over the long run, the fraction of bad chips produced by the process

is 20%. Thoroughly testing a chip to determine whether it is good or bad is rather expensive, so a cheaper test is used. All good chips will past the test, but so will 7.5% of the bad chips. (a) Given that a chip passes the test, what is the probability that it is a good chip? Use at least 3 decimal places. (b) If the company sells all chips that pass the cheaper test, what percentage of sold chips will be bad? Use at least 3 decimal places.
Business
1 answer:
zysi [14]3 years ago
7 0

Answer:

(a) Given that a chip passes the test, what is the probability that it is a good chip?

LetB = {the chip is good}

A={the chip passes the cheap test}.

Bc={the chip is bad}

Ac={the chip fails the cheap test}

P(A | B) = 1

P(A | B c ) = 0.075

= \frac{P(A | B)P(B)}{P(A | B)P(B) + P(A | Bc)P(Bc)} = \frac{1.0.8}{1.0.8+ 0.075 · 0.2}  ≈ 0.9751

(b) If the company sells all chips that pass the cheaper test, what percentage of sold chips will be bad?

P(B c  |A) =  1 − P(B | A) = 1 -  0.9751 = 0.0249

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EcoFabrics has budgeted overhead costs of $1,039,500. It has allocated overhead on a plantwide basis to its two products (wool a
vichka [17]

Answer:

1. Cutting $1.80 per machine hour

Design $390 per setup

2. Wool product line $627,000

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4. Wool Product line $519,750

Cotton Product line $519,750

Explanation:

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Overhead rate using the activity based costing

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2. Calculation to determine the amount of overhead allocated to the wool product line and the cotton product line using activity-based costing

Overhead allocated to the wool product line and the cotton product line

Wool product line = (110,000 * $1.80) + (1,100 * $390)

Wool product line= $198,000 + $429,000

Wool product line= $627,000

Cotton Product line = (110,000 * $1.80) + (550 * $390)

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3.Calculation to determine the overhead rate using traditional approach.

Overhead rate using traditional approach

Overhead rate = Total Overhead / Direct labor hours

Overhead rate= $1,039,500 / 495,000

Overhead rate= $2.10

4. Calculation to determine What amount of overhead would be allocated to the wool and cotton product lines using the traditional approach

Overhead allocated using the traditional method

Wool Product line = $1,039,500 / 2

Wool Product line= $519,750

Cotton Product line = $1,039,500 / 2

Cotton Product line= $519,750

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