1-a. Draw a statistical control chart and plot the variance data given above. 1-b. Which variances will be investigated?
1-a. Draw a statistical control chart and plot the variance data given above. 1-b. Which variances will be investigated?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The director of cost management for Odessa Company uses a statistical control chart to help management determine
when to investigate variances. The critical value is 1 standard deviation. The company incurred the following direct-labor
efficiency variances during the first six months of the current year.
January
February
March.
April
May
June
$ 250 F
800 U
700 U
908 U
1,050 U
1,200 U
The standard direct-labor cost during each of these months was $19,000. The controller has estimated that the firm's
monthly direct-labor variances have a standard deviation of $950.
Required:
1-a. Draw a statistical control chart and plot the variance data given above.
1-b. Which variances will be investigated?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa83e69e2-71b6-4b11-99c3-66ac008872ac%2Ffe61dad9-b2a3-4600-a5d7-a3860be13027%2F30jw8c_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
The director of cost management for Odessa Company uses a statistical control chart to help management determine
when to investigate variances. The critical value is 1 standard deviation. The company incurred the following direct-labor
efficiency variances during the first six months of the current year.
January
February
March.
April
May
June
$ 250 F
800 U
700 U
908 U
1,050 U
1,200 U
The standard direct-labor cost during each of these months was $19,000. The controller has estimated that the firm's
monthly direct-labor variances have a standard deviation of $950.
Required:
1-a. Draw a statistical control chart and plot the variance data given above.
1-b. Which variances will be investigated?
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