If Variance Analysis Is Used for Performance Evaluation, Managers Are

question 140

True/False

If variance analysis is used for performance evaluation, managers are encouraged to meet targets using creativity and resourcefulness.

---

Definitions:

Process Costing

A method of costing used to ascertain the cost of a product at each process or stage of manufacture.

Weighted-Average Method

An inventory costing method that assigns a weighted average cost to each unit of inventory on hand.

Equivalent Unit

An accounting measure used to compute the number of units produced during a reporting period, converting partially completed units into an equivalent number of fully completed units.

Equivalent Units

A concept used in process costing that converts work-in-process inventory to a number of fully finished units.