Bi-land Company
Bi-land Company's standard cost is $150,000. The allowable deviation is ±10%. The actual costs for six months are as follows: $$\begin{array} { l l }
\text { January } & \$ 130,000 \
\text { February } & \$ 120,000 \
\text { March } & \$ 145,000 \
\text { April } & \$ 160,000 \
\text { May } & \$ 170,000 \
\text { June } & \$ 180,000
\end{array}$$
-Refer to Bi-land Company. How many months resulted in a variance that is higher than the upper control limit?

Question

Bi-land Company
Bi-land Company's standard cost is $150,000. The allowable deviation is ±10%. The actual costs for six months are as follows: $$\begin{array} { l l } 
\text { January } & \$ 130,000 \
\text { February } & \$ 120,000 \
\text { March } & \$ 145,000 \
\text { April } & \$ 160,000 \
\text { May } & \$ 170,000 \
\text { June } & \$ 180,000
\end{array}$$
-Refer to Bi-land Company. How many months resulted in a variance that is higher than the upper control limit?

Quizplus · Accepted Answer

The upper control limit is $150,000 + 10% of $150,000 = $165,000. The months with costs higher than this limit are May ($170,000) and June ($180,000), resulting in 2 months.

Bi-Land Company Bi-Land Company's Standard Cost Is $150,000 -Refer to Bi-Land Company

Bi-Land Company
Bi-Land Company's Standard Cost Is $150,000 -Refer to Bi-Land Company