Total manufacturing cost per unit is the sum of direct labor cost and parts cost. Show the probability distribution for total manufacturing cost per unit:
z = x + y
f(z)
128
0.05
130
133
138
140
0.2
143
Total
0.00
Compute the expected value (in dollars), variance, and standard deviation (in dollars) of total manufacturing cost per unit: (Round your answer for standard deviation to two decimal places)
Expected value: 135.3 dollars
Variance: 21.51
Standard deviation: 4.64 dollars
(e) Are direct labor and parts costs independent? Why or why not?
Since the covariance equals , which is not equal to zero, we can conclude that direct labor cost is not independent of parts cost.
