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Eastsound operates daily round-trip flights between two cities using a fleet of three planes: the Viper, the Tiger, and the Eagle. The budgeted quantity of fuel for each round trip is the average fuel usage, which over the past 12 months has been 150 gallons. Eastsound has set the upper control limit at 180 gallons and the lower control limit at 130 gallons. The operations manager received the following report for round-trip fuel usage for the period by the three planes.

a. Create quality control charts for round-trip fuel usage for each of the three planes for the period. What inferences can you draw from them?
b. Some managers propose that Eastsound present its quality control charts in monetary terms rather than in physical quantities (gallons). What are the advantages and disadvantages of using monetary fuel costs rather than gallons in the quality controlcharts?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9955795

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