In a Control Chart, Expected Variation Is Defined by the

question 62

Multiple Choice

In a control chart, expected variation is defined by the

• A) standard deviation.
• B) standard error of the distribution.
• C) only upper control limits.
• D) upper and lower control limits.

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Definitions:

Favorable Variances

Variances that occur when actual costs are less than standard or budgeted costs, or actual revenues exceed expectations, benefiting the company's financial performance.

Unfavorable Variances

Situations where actual costs are higher than planned or budgeted costs, or actual revenue is lower than expected.

Management By Exception

A management strategy where only significant deviations from planned results are brought to the attention of management, focusing efforts on areas that are not performing as expected.

Standard Costs

Preset costs established for the manufacture of a product, including direct materials, direct labor, and overhead expenses, against which actual costs are compared.