A Fraction Nonconforming Chart Is Frequently Converted to a Percent

question 16

Multiple Choice

A fraction nonconforming chart is frequently converted to a percent nonconforming chart:

• A) so that employees can understand it better
• B) because of the difficulty of variable subgroup size
• C) so that an average subgroup size (n) can be used
• D) so that the lower control limit will be eliminated

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Definitions:

Accounting Rate of Return

A financial ratio used to estimate the profitability of an investment, calculated as average annual profit divided by initial investment cost.

Accrual Accounting

An accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when cash transactions occur.

Hurdle Rate

The minimum rate of return on a project or investment required by a manager or investor.

Weighted Average Cost

A method of calculating the total cost of goods available for sale, considering the weighted average of all goods.