When Using the Statistical Control Chart to Investigate Variances

question 46

Multiple Choice

When using the statistical control chart to investigate variances

• A) managers should only investigate variances that are beyond the critical value.
• B) managers should only investigate variances that are fall below the critical value over a number of consecutive periods.
• C) any variances that go beyond the critical values are likely to be the result of random events such as employee illness.
• D) managers should estimate the critical values by averaging the variances over a number of periods.

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Definitions:

Direct Labor

The cost of wages for labor directly involved in the production of goods or services.

Raw Material

Basic materials and substances used in the initial stages of production to create goods and services.

Raw Materials

Basic materials that are processed and used in the manufacturing of goods or products.

Work in Process

A stage in the manufacturing process where the product is partially completed but not yet ready for sale.