Final answer:
Normal standards take into account rest periods, machine breakdowns, and setup time, which makes option 'c' the correct answer. For the service scenario, planning 1.1 hours per technician is slightly above the average and could account for variability, but without knowing the acceptable confidence level, a definitive conclusion cannot be made.
Step-by-step explanation:
The concept mentioned in the student's question pertains to different types of standards used in cost accounting and performance measurement in businesses. Companies use standards to plan budgets and evaluate performance. The correct answer to the question is, 'c. Normal standards allow for rest periods, machine breakdowns, and setup time.' This type of standard is practical and takes into account the average expected conditions which include normal downtime such as rest periods, occasional machine breakdowns, and equipment setup times.
As for the reference information provided, since the average service time is one hour with a standard deviation of one hour, and you're planning to service 70 units, the Central Limit Theorem could be applied here to ascertain if 1.1 hours per technician is sufficient. However, the question does not provide enough information to make a definitive calculation, such as the level of confidence we are willing to accept. But knowing that there's variability, planning for slightly more than the average time seems prudent.