Which of the Following Is TRUE Regarding the Average Outgoing

question 41

Multiple Choice

Which of the following is TRUE regarding the average outgoing quality level?

• A)An AOQ value of 1 is ideal,because all defects have been removed.
• B)AOQ is always greater than AQL but less than LTPD.
• C)AOQ rises (worsens)following inspection of failed lots.
• D)AOQ is very low (very good)for extremely poor quality lots.
• E)None of the above is true.

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Definitions:

Standard Costs

Estimated or predetermined costs of manufacturing, selling, or doing something, which are used for budgetary and costing purposes.

Cost System

A method used by firms to track, record, and analyze costs associated with their operations, typically to improve efficiency or profitability.

Kilos

A metric unit of mass equal to one thousand grams or approximately 2.20462 pounds.

Direct Materials

Raw materials that can be directly traced to the production process and are a significant part of the finished product.