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Quality control. 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.

Trip

Viper

Tiger

Eagle

1

156

155

146

2

141

141

156

3

146

144

167

4

152

161

156

5

156

138

183

6

161

170

177

7

167

149

189

8

186

159

171

9

173

152

176

10

179

140

185

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 control charts?

Cost Accounting, Accounting

  • Category:- Cost Accounting
  • Reference No.:- M91577381

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