CAPT OF ACR LGT ACFT MISTAKENLY SET THE WRONG ALT INTO THE ACFT FMC RESULTING IN AN ALT OVERSHOOT.

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CRUISING AT FL200 WITH REQUESTED ALT OF FL230; CTR CLRED US TO FL210. I SELECTED FL210 WHILE NOTING THE NEW ASSIGNED ALT ON THE PRIMARY FLT DISPLAY. I THEN PUSHED THE ALT SELECT KNOB TO ENGAGE VNAV WHILE I MONITORED THE FLT MODE ANNUNCIATOR TO VERIFY ENTERING CLB MODE. A FEW MINS LATER; CTR TOLD US TO MAINTAIN FL210 AND I NOTICED WE WERE LEVEL AT FL220. I DON'T KNOW HOW FL220 GOT IN THE FMS; BUT MUST ASSUME THAT WHEN I PUSHED THE ALT KNOB TO ENTER VNAV; THE ASSIGNED ALT CHANGED 1 DIGIT WHILE I WAS LOOKING OVER AT THE FLT MODE ANNUNCIATOR. WE WERE AT FAIRLY LIGHT GROSS WT AND CLBING FAST WHEN THE FLT ATTENDANT CAME IN TO OFFER COFFEE. I GLANCED AT THE FMA; NOTICED ALT CAPTURE AND TURNED MY ATTN TO THE FLT ATTENDANT. AS I LOOKED BACK; WE WERE IN MANAGED LEVEL FLT. I DIDN'T NOTICE WE WERE 1000 FT HIGH. BECAUSE OF THE MULTIFUNCTIONAL USES OF THIS KNOB (PUSH; PULL; TWIST) FOR VNAV MODES AND LEVEL CHANGES; IT CAN CREATE A TRAP. IF EACH MODE/LEVEL IS VERIFIED IN SEQUENCE IT MAY END UP ERRONEOUS. THE ANSWER WITH THIS KNOB IS TO REVERIFY ALL SELECTIONS AFFECTED BY THIS KNOB AFTER REMOVING YOUR HAND FROM IT.