Acceptance Sampling

question 141

Multiple Choice

Acceptance sampling:

• A) is the application of statistical techniques to the control of processes.
• B) was developed by Walter Shewhart of Bell Laboratories.
• C) is used to determine whether to accept or reject a lot of material based on the evaluation of a sample.
• D) separates the natural and assignable causes of variation.
• E) is another name for 100% inspection.

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Definitions:

Total Variable Cost

The sum of all variable costs (costs that change with production volume) involved in producing a specific level of output.

Activity Declines

A reduction in the level of operations, production, or business activities.

Activity Variance

measures the difference between the actual costs incurred and the budgeted costs based on the actual level of activity.

Actual Revenue

The real income that a company receives from its business activities, measured over a specific period.