Jasmine Morron is examining a statistical control chart on the recent cost report of her manufacturing company. Jasmine is focusing on one specific process, the labour efficiency variance of polishing. She determines that the critical values for this process are $1000. Which of the following statements is correct?
A) Jasmine should investigate only unfavourable variances that are larger than $1000.
B) Any variances of less than $1000 are likely to be the result of random events.
C) Jasmine should investigate unfavourable variances of any size, and favourable variances that are larger than $1000.
D) Jasmine should investigate any variances that are larger than $500.

Question

Quizplus · Accepted Answer

Variances less than the critical value of $1000 are likely due to random fluctuations and do not require investigation.

Jasmine Morron Is Examining a Statistical Control Chart on the Recent