Felicidad, Inc., uses statistical process control charts to determine whether material quantity Ob1. 5 variances are the result of special or common cause variation. The following variances represent the results of analyses over the previous 16 weeks. The week number is in parentheses. \(\mathrm{U}\) and \(\mathrm{F}\) indicate unfavorable and favorable.

a. Prepare a statistical process control chart to determine whether any of the material quantity variances might represent unusual circumstances worthy of investigation. (Treat favorable variances as positive numbers and unfavorable variances as negative numbers.) To solve the problem using Minitab, use the following instructions: Open Minitab. Enter variances for weeks 1-6 in column C1. Click on Stat. Click on Control Charts. Click on Individuals. Enter \(\mathrm{Cl}\) into Variable field. Click OK.

lower control limits should be placed on your graph at \(Y\)-axis values 1,296 and \(-1,388\), respectively. Refer to Exhibit 12 in the chapter for an illustration of control limit and process average placement. You may manually calculate the process average or use the average function within Excel.

b. Refer to the control chart that you prepared in part (a). In general, what may be potential causes of unfavorable material quantity variances?

c. How does statistical process control assist managers in making decisions about cost accounting information?

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(1) 520 F (2) 550 F (3) 250 U (4) 325 F (7) 200 U (10) 115 F (13) 1,500 U (15) 125 F (5) 127 U (8) 200 U (11) 150 U (14) 225 U (16) 130 F (6) 525 U (9) 150 F (12) 530 F