Past experience indicates a 75% probability that a reported overhead cost variance is not due to a specific cause (i. e., is attributable to random fluctuations). Past experience also shows that the average cost to investigate the underlying cause of a variance is $1,200 and that the cost to correct an out-of-control process is, on average, $3,800. If the underlying variance is systematic and management decides not to investigate the cause of the variance, the costs are thought to be significant: $28,000. Required:
1. Given the preceding information, what is the expected value of investigating the reported variance? Expected value $ 2,150
2. Prepare a payoff table that summarizes the above information. (Hint: Your table should include cells for combinations of management actions (investigate vs. do not investigate) and states of nature (systematic cause vs. random event), plus cells to represent the expected cost of each management action. States of Nature (prob.) Systematic (25%) Management Action Investigate Don't Investigate Random (75%) Expected Value 2,150 7,000

The hawthorne works was a large western electric factory with 45,000 employees. during the 1920s and 1930s, hawthorne works was the site of some well-known industrial studies. in one of the studies, researchers investigated the impact of different working conditions on worker productivity. prior to the start of the study, researchers secretly measured workers' productivity for several weeks. then researchers chose two workers, who then chose their own teams. the teams were separated from the general workforce and completed their work in different experiment rooms where the researchers could observe them more easily. over a 5-year period researchers manipulated the structure of the workday for each team (number and duration of breaks and number of hours per shift). for each of these changes in working conditions, the researchers measured the effect on productivity. for some conditions, such as frequent short breaks, workers rebelled by intentionally decreasing productivity.why did the researchers secretly measure the workers' productivity before creating the two treatment groups? a, to create similar treatment groups so that a cause-and-effect relationship could be establishedb, to draw conclusions about the productivity of all workers in the plant based on the test groupsc, to directly control for confounding variablesd, to provide a baseline for measuring worker productivity

What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed milk

Amanufacturer has paid an engineering firm $200,000 to design a new plant, and it will cost another $2 million to build the plant. in the meantime, however, the manufacturer has learned of a foreign company that offers to build an equivalent plant for $2,100,000. what should the manufacturer do?