A Hotel Tracks the Number of Complaints Per Month

question 21

Multiple Choice

A hotel tracks the number of complaints per month. When the process is in control, there is an average of 35 complaints per month. Assume that a 2- sigma control limit is used. The next four months have 33, 27, 29, and 43 complaints. What should management do?

• A) Look for assignable causes because the process is out of control.
• B) Look for assignable causes because the process is in control.
• C) Look for common causes because the process is out of control.
• D) Do nothing; the process is in control.

---

Definitions:

Current Cost Profits

The earnings achieved by a company based on the replacement costs of the assets used in its operations rather than historical cost accounting.

Operating Profits

Profits from a company's core business operations, excluding deductions of taxes and interest.

Regulation S-X

Rules and regulations set by the Securities and Exchange Commission (SEC) that dictate the form, content, and requirements of financial statements submitted by public companies in the United States.

Replacement Cost

The current cost of replacing an asset with a new one of the same kind and quality at current prices.