Derf Corporation Uses a Standard Cost System in Which It

question 3

Multiple Choice

Derf Corporation uses a standard cost system in which it applies manufacturing overhead on the basis of standard direct labor-hours. Two direct labor-hours are required for each unit produced. The denominator activity was set at 9,000 units. Manufacturing overhead was budgeted at $135,000 for the period; 20 percent of this cost was fixed. The 17,200 hours worked during the period resulted in production of 8,500 units. Variable manufacturing overhead cost incurred was $108,500 and fixed manufacturing overhead cost was $28,000. The fixed manufacturing overhead budget variance for the period was:

• A)$6,300 Unfavorable
• B)$2,500 Unfavorable
• C)$1,500 Unfavorable
• D)$1,000 Unfavorable

Recognize the principles of Six Sigma quality and its statistical requirements.

Describe acceptance sampling's role in quality control and its impact on decision-making.

Comprehend the factors influencing the development of an acceptance sampling plan including AOQ, AQL, LTPD, α, and β.

Appreciate statistical definitions and terminologies used in quality control and their practical implications.