In General Terms, a Capable Process Is One Whose Variability

question 2

True/False

In general terms, a capable process is one whose variability (σ) is small in relation to the distance between the centerline μ and the upper and lower specification limits.

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Definitions:

Variable Overhead Costs

Indirect costs of production that fluctuate with the level of output, such as utilities and indirect labor.

Budgeted Overhead Cost

The estimated costs associated with running a company that are not directly tied to a specific product or service, including rent and utilities.

Machine-Hours

A measure of production time, representing the total hours that machines are in operation during a specific period.

Spending Variance

The difference between the actual amount spent on a particular item and the amount that was budgeted for it.