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Business, 16.04.2020 20:17 meg12331

He 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 $ 250 F February 800 U March 700 U April 900 U May 1,050 U June 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: 2-a. Determine the cutoff value for investigation if the controller’s rule of thumb is to investigate all variances equal to or greater than 6 percent of standard cost. 2-b. Based on the cutoff value, which month will have its direct-labor efficiency variance investigated?

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He director of cost management for Odessa Company uses a statistical control chart to help managemen...
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