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Budget lapsing at army hospitals. Accountants use the term
Chapter , Problem 111E(choose chapter or problem)
Problem 111E
Budget lapsing at army hospitals. Accountants use the term budget lapsing to describe the situation that occurs when unspent funds do not carry over from one budgeting period to the next. Due to budget lapsing, U.S. army hospitals tend to stockpile pharmaceuticals and other supplies toward the end of the fiscal year, leading to a spike in expenditures. This phenomenon was investigated in the Journal of Management Accounting Research (Vol. 19, 2007). Data on expenses per full-time equivalent employees for a sample of 1,751 army hospitals yielded the following summary statistics: x̄ = $6,563, m = $6,232, s =$2,484, QL = $5,309, and QU = $7,216.
a. Interpret, practically, the measures of relative standing.
b. Compute the interquartile range, IQR, for the data.
c. What proportion of the 1,751 army hospitals have expenses between $5,309 and $7,216?
Questions & Answers
QUESTION:
Problem 111E
Budget lapsing at army hospitals. Accountants use the term budget lapsing to describe the situation that occurs when unspent funds do not carry over from one budgeting period to the next. Due to budget lapsing, U.S. army hospitals tend to stockpile pharmaceuticals and other supplies toward the end of the fiscal year, leading to a spike in expenditures. This phenomenon was investigated in the Journal of Management Accounting Research (Vol. 19, 2007). Data on expenses per full-time equivalent employees for a sample of 1,751 army hospitals yielded the following summary statistics: x̄ = $6,563, m = $6,232, s =$2,484, QL = $5,309, and QU = $7,216.
a. Interpret, practically, the measures of relative standing.
b. Compute the interquartile range, IQR, for the data.
c. What proportion of the 1,751 army hospitals have expenses between $5,309 and $7,216?
ANSWER:
Answer
Step 1 of 3
(a)
Given 1,751 army hospitals expenses per full-time equivalent employees.
We have given the following summary statistics:
We are asked to interpret, practically, the measures of relative standing.
Figure 1: A reference Boxplot to represent the median and the quartiles, The interquartile range,
A reference boxplot here represents all key data summary like median, quartile and interquartile range etc.
Hence from the figure and summary statistics, we can draw the following measures.
The average or mean expenses of a full-time employee are
The median expenses per employee are meaning half of all expenses were less than $6,232 and a half were greater than $6,232.
The lower quartile is $5,309 and we know that the
Hence 25% percent of all expenses per employee were below $5,309.
The upper quartile is $7,216 and we know that the
Hence 75% percent of all expenses per employee were below $7,216.