MANAGERIAL ACCOUNTING FOR
MANAGERS 6TH EDITION 2026 VARIANCE
ANALYSIS AND PERFORMANCE
EVALUATION PRACTICE SET
◉ Planning
Answer: The process of setting goals and making plans to achieve
them
◉ Control
Answer: Monitoring planning decisions and evaluating activities and
employees
◉ Fixed costs
Answer: Costs that do not change when the volume of activity
changes
◉ Variable costs
Answer: Costs that change in proportion to changes in the volume of
activity
,◉ Direct costs
Answer: Costs that are easily traceable to a single cost object, like a
specific product
◉ Indirect costs
Answer: Costs that cannot be easily or cost-beneficially traced to a
single cost object
◉ Product costs
Answer: Costs necessary to create a product, including direct
materials, direct labor, and factory overhead
◉ Period costs
Answer: Nonproduction costs associated with a time period,
expensed immediately
◉ Raw materials inventory
Answer: Goods acquired to use in making products
◉ Work in process inventory
Answer: Products currently being manufactured but not yet
complete
, ◉ Finished goods inventory
Answer: Completed products that are ready for sale
◉ Prime costs
Answer: Direct materials + Direct labor
◉ Conversion costs
Answer: Direct labor + Factory overhead
◉ Cost of goods manufactured
Answer: Direct materials + Direct labor + Factory overhead incurred
in making products
◉ Raw materials inventory turnover
Answer: Raw materials used / Average raw materials inventory
◉ Days' sales in raw materials inventory
Answer: (Ending raw materials inventory / Raw materials used) ×
365
◉ Cost accounting system
MANAGERS 6TH EDITION 2026 VARIANCE
ANALYSIS AND PERFORMANCE
EVALUATION PRACTICE SET
◉ Planning
Answer: The process of setting goals and making plans to achieve
them
◉ Control
Answer: Monitoring planning decisions and evaluating activities and
employees
◉ Fixed costs
Answer: Costs that do not change when the volume of activity
changes
◉ Variable costs
Answer: Costs that change in proportion to changes in the volume of
activity
,◉ Direct costs
Answer: Costs that are easily traceable to a single cost object, like a
specific product
◉ Indirect costs
Answer: Costs that cannot be easily or cost-beneficially traced to a
single cost object
◉ Product costs
Answer: Costs necessary to create a product, including direct
materials, direct labor, and factory overhead
◉ Period costs
Answer: Nonproduction costs associated with a time period,
expensed immediately
◉ Raw materials inventory
Answer: Goods acquired to use in making products
◉ Work in process inventory
Answer: Products currently being manufactured but not yet
complete
, ◉ Finished goods inventory
Answer: Completed products that are ready for sale
◉ Prime costs
Answer: Direct materials + Direct labor
◉ Conversion costs
Answer: Direct labor + Factory overhead
◉ Cost of goods manufactured
Answer: Direct materials + Direct labor + Factory overhead incurred
in making products
◉ Raw materials inventory turnover
Answer: Raw materials used / Average raw materials inventory
◉ Days' sales in raw materials inventory
Answer: (Ending raw materials inventory / Raw materials used) ×
365
◉ Cost accounting system
