Which type of tolerance allows variation in both directions from the specified dimension?

Bilateral tolerance is the correct choice because it specifies a range of acceptable dimensions that permit variation both above and below the nominal size. This type of tolerance is essential in engineering and manufacturing as it allows for flexibility in parts and components, acknowledging that small variations can occur during production.

In a bilateral tolerance system, for example, if a part is designed with a nominal dimension of 50 mm and has a bilateral tolerance of ±2 mm, the acceptable dimension range would be from 48 mm to 52 mm. This adaptability is crucial for ensuring proper function and fit within assembly processes.

Understanding tolerance types is vital for engineers, as it influences the quality, manufacturability, and cost of producing components. Bilateral tolerance is particularly beneficial when both the upper and lower limits of a dimension are critical to performance, making it a preferred choice for many engineering designs.