Using Control Limits to Determine When to Investigate a Variance

Kavallia Company set a standard cost for one item at $$328,000$; allowable deviation is $$ $$14,500.$ Actual costs for the past six months are as follows:

June$$330,500$September$$314,000$July$345,000$October$331,000$August$346,800$November$324,000$

Required:

$1.$ Calculate the variance from standard for each month. Lseng Control Limbs to Deturmine When to Levivistigate a Variance

Required:

$1.$ Calculate the variante from standard for wadh month.

Which menths should be investigatad?

$2.$ What if the comparry uses a tmo$-$part rule for itvistiqating variances? The allomable deviatien is the lesser of $4$ percont of the slandiard amount or $\backslash (\backslash$$ $14,500\backslash ).$ Now which morthis should be ilivistigated?

Jun$$

luty

Au$$ust

Septembir

Octaber

Nerv$$mber