Samples of 2000 Were Taken from an Encoding Machine at a Bank

question 23

Multiple Choice

Samples of 2000 were taken from an encoding machine at a bank over a five-week period.Management is willing to use the historical average for the central line of the chart.
$$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Sample } \\\text { Number }\end{array} & \begin{array} { c } \text { Proportion } \\\text { Defective }\end{array} \\\hline 1 & 0.001 \\2 & 0.005 \\3 & 0.006 \\4 & 0.006 \\5 & 0.002 \\\hline\end{array}$$
Which one of the following would be the limits for an attribute control chart with z = 2?

• A) UCL > 0.010 and LCL > 0.001
• B) UCL > 0.010 and LCL < 0.001
• C) UCL < 0.010 and LCL > 0.001
• D) UCL < 0.010 and LCL < 0.001

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Definitions:

Cash Disbursements

Outflows of cash for expenses, purchase of assets, or repayment of debt by a business within a given period.

Manufacturing Overhead Budget

A financial plan that estimates the expected costs related to manufacturing overhead for a specific period.

Variable Overhead Rate

A financial metric that represents the costs that vary with production levels in manufacturing, calculated as variable overhead costs divided by a measure of activity.

Fixed Manufacturing Overhead

Indirect manufacturing costs that remain constant regardless of the level of production, such as rent, insurance, and salaries of certain employees.