Special Cause Variation Arises When Something Out of the Ordinary

question 35

True/False

Special cause variation arises when something out of the ordinary occurs.

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Definitions:

Turnover

The rate at which inventory is sold and replaced over a period or the rate at which employees leave and are replaced in a business.

Net Operating Income

Represents the profit a company makes from its operational activities after subtracting operating expenses from its operating revenues.

Profit Centres

Divisions or segments of a business with direct responsibility for generating profits.

External Sales

Sales made to customers outside of the company, as opposed to internal transactions within the company.