A Fastener Company Produces a Certain Type of Bolt for the Automobile

question 102

Multiple Choice

A fastener company produces a certain type of bolt for the automobile industry with a nominal (target) length of 2.00 inches.The specifications for the length of the bolt are 2.00 ± .006 inches.An automobile manufacturer will only purchase from this company if the sigma level of capability of the process is at least 4.If the process mean is equal to 2.001,determine the maximum process standard deviation necessary for the fastener manufacturing company in order to qualify as a supplier for the automobile manufacturing company.

• A).0125
• B).005
• C).00125
• D).00025

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Definitions:

Hybrid Costing System

A costing system that blends elements of both job costing and process costing methods, suitable for industries that manufacture items in batches.

Applied Overhead

The estimated overhead cost assigned to individual units of production.

Finished Goods Inventory

Merchandise that has finished the production phase but has not yet been delivered or sold to purchasers.

Process Costing

A method of costing used in manufacturing where the cost of products is determined by averaging over units produced, typically used in industries where the production is continuous.