The word 'allowable' is the adjective form for the verb 'to allow'. The noun forms for the verb are allowance and the gerund allowing.
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Type I error.
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Yes, in statistics, the epsilon symbol is used for maximum allowable error. http://www.liaad.up.pt/~jgama/IWKDDS/Papers/p14.pdf
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Maximum recess dimension allowable from the front edge of a box or plaster ring to the surface face of the drywall?