When a Variance Is Identified as Insignificant, Managers Need to Find

question 80

True/False

When a variance is identified as insignificant, managers need to find out the cause of the variance.

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Definitions:

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.

Average Daily Cost

The average daily cost refers to the total cost per day, calculated by dividing the total expenses by the number of days in the period under consideration.

Days' Sales

A financial metric that estimates the average time it takes a company to convert its inventory into sales.

Cost Of Goods Sold

Direct expenses associated with creating the goods a company sells, including both materials and labor.