MANAGERIAL ACCOUNTING FOR
MANAGERS 6TH EDITION 2026 BREAK
EVEN ANALYSIS CONTRIBUTION MARGIN
AND PROFIT PLANNING GUIDE
◉ Absorption costing
Answer: Includes direct materials, direct labor, and both variable
and fixed overhead costs in product costs
◉ Contribution margin
Answer: The excess of sales over variable costs
◉ Budget
Answer: A formal statement of a company's future plans, expressed
in monetary terms
◉ Continuous (rolling) budgeting
Answer: Continually revising budgets as time passes by adding a
new budget period to replace the one that just elapsed
◉ Master budget
, Answer: A formal, comprehensive plan containing several individual
budgets linked together
◉ Sales budget
Answer: Shows planned sales units and expected dollars from these
sales
◉ Production budget
Answer: Shows the number of units to be produced, based on sales
and inventory policies
◉ Capital expenditures budget
Answer: Summarizes expected investing activities in plant assets
◉ Cash budget
Answer: Shows expected cash inflows and outflows
◉ Units to produce
Answer: Budgeted ending inventory units plus budgeted sales units
minus beginning finished goods inventory units
◉ Fixed (static) budget
Answer: Based on a single predicted amount of sales or activity
MANAGERS 6TH EDITION 2026 BREAK
EVEN ANALYSIS CONTRIBUTION MARGIN
AND PROFIT PLANNING GUIDE
◉ Absorption costing
Answer: Includes direct materials, direct labor, and both variable
and fixed overhead costs in product costs
◉ Contribution margin
Answer: The excess of sales over variable costs
◉ Budget
Answer: A formal statement of a company's future plans, expressed
in monetary terms
◉ Continuous (rolling) budgeting
Answer: Continually revising budgets as time passes by adding a
new budget period to replace the one that just elapsed
◉ Master budget
, Answer: A formal, comprehensive plan containing several individual
budgets linked together
◉ Sales budget
Answer: Shows planned sales units and expected dollars from these
sales
◉ Production budget
Answer: Shows the number of units to be produced, based on sales
and inventory policies
◉ Capital expenditures budget
Answer: Summarizes expected investing activities in plant assets
◉ Cash budget
Answer: Shows expected cash inflows and outflows
◉ Units to produce
Answer: Budgeted ending inventory units plus budgeted sales units
minus beginning finished goods inventory units
◉ Fixed (static) budget
Answer: Based on a single predicted amount of sales or activity
