An online retailer monitors customer complaints through social media. There are seventeen categories associated with these compl
aints and include such categories as poor quality, not as described on-line, price too high and slow delivery. When creating a chart to determine which of these categories represents the most frequent problem, it will be necessary to draw a?
1 answer:
Answer: Pareto Chart
Explanation:
A Pareto Chart is a type of chart that mixes both the line and bar graphs.
It works by putting the Frequency of the complaint categories on the vertical axis and the category on the horizontal axis.
The frequency bars are arranged from the most frequent to the least frequent and then there is a line that shows the cumulative frequencies of the complaint categories.
The benefit of this graph is that one can see the most frequent complaint as soon as they look at the graph which is why it is most useful to this question.
I have attached an example to better explain.
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Answer:
B) Direct materials price variance
Explanation:
Company uses sugar while producing a product, that means it is a direct material for the product, further provided that cost gets doubled of buying a unit of sugar, that is actual rate is now twice of earlier rate.
Therefore since only direct material price variance uses actual rate it will be affected.
Direct Material Price Variance = (Standard Price - Actual Price) Actual quantity.
Else labor variance does not use direct material price, therefore option C) and option D) are invalid further direct material quantity variance uses standard rate and no actual rate is used.
Therefore correct option is
D) Direct Material Price Variance