A Company Produces a Product Which Is Designed to Weigh

question 21

Multiple Choice

A company produces a product which is designed to weigh 10 oz.,with a tolerance of + 0.5 oz.The process produces products with an average weight of 9.95 oz.and a standard deviation of 0.10 oz.The process capability ratio for this process,with z = 3,is

• A)1.67.
• B)0.
• C)0.8333.
• D)-1.67.

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Definitions:

Marginal Cost

The extra expense incurred for making an additional unit of a product, emphasizing its role in decision-making processes for production levels.

Average Total Cost

Average total cost is the total cost of production divided by the quantity produced, covering both fixed and variable costs, and is often used to assess a firm's efficiency.

Average Variable Cost

The sum of all variable expenses divided by the total output, indicating the cost of variable elements for each unit produced.

Accounting Profit

The net income for a company calculated by subtracting total expenses from total revenues.