P8-45 (similar to) Question Help * Sara's Kettle Potato Chips produces gourmet chips distributed to chain sub shops throughout California. To ensure that their chips are of the highest quality and have taste appeal, Sara has a rigorous inspection process. For quality control purposes, Sara has a standard based on the pounds of chips inspected per hour and the number of pounds that pass or fail the inspection. Sara expects that for every 5,500 pounds of chips produced, 1,100 pounds of chips will be inspected. Inspection of 1,100 pounds of chips should take 1 hour. Sara also expects that 6% of the chips inspected will fail the inspection. During the month of May, Sara produced 1,182,500 pounds of chips and inspected 198,000 pounds of chips in 225 hours. Of the 198,000 pounds of chips inspected, 13,080 pounds of chips failed to pass the inspection. 1. Compute two variances that help determine whether the time spent on inspections was more or less than expected. (Follow a format similar to the one used for the variable overhead spending and efficiency variances, but without prices.) Compute two variances that can be used to evaluate the percentage of the chips that fails the inspection. 2
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