MAC2601 2026 FINAL SCRIPT EXAM
QUESTIONS AND ANSWERS COMPLETE
STUDY GUIDE RESOURCE
◉ Integrity
Answer: Avoid conflicts of interest; refrain from activities that would
prejudice your ability to carry out duties ethically.
◉ Credibility
Answer: Communicate information fairly and objectively; disclose all
relevant information that could influence an intended user's
understanding.
◉ Cost
Answer: The monetary value of resources sacrificed or forgone to
achieve a specific objective.
◉ Cost Pool
Answer: A grouping of individual indirect costs. Example:
maintenance department costs pooled together before allocation.
◉ Cost Driver
,Answer: A factor that causes or influences a change in the total cost
of an activity.
◉ Cost Object
Answer: Anything to which costs are assigned — a product, service,
customer, department, or project.
◉ Cost Assignment
Answer: The process of assigning costs to cost pools or from cost
pools to cost objects (using direct tracing or allocation).
◉ Direct Costs
Answer: Can be economically traced directly to a cost object (e.g.,
lumber in a table, wages of assembly workers).
◉ Indirect Costs
Answer: Cannot be conveniently or economically traced to a specific
cost object; must be allocated (e.g., factory utilities, depreciation).
◉ Variable Costs
Answer: Change in TOTAL proportionally with changes in activity.
Constant on a PER UNIT basis. (e.g., direct materials, direct labor).
, ◉ Fixed Costs
Answer: Remain CONSTANT IN TOTAL regardless of activity level.
Change on a per unit basis (inversely). (e.g., rent, depreciation,
supervisor salaries).
◉ Mixed (Semi-Variable) Costs
Answer: Have BOTH a fixed component and a variable component
(e.g., a utility bill with a base charge plus usage rate).
◉ Product Costs
Answer: Costs attached to the product; flow through inventory until
sold. Includes DM, DL, and Manufacturing Overhead.
◉ Period Costs
Answer: Expensed in the period incurred; NOT inventoried. Includes
selling expenses, G&A expenses, advertising, etc.
◉ Direct Materials (DM)
Answer: Raw materials physically incorporated into the finished
product and traceable to it (e.g., steel in a car).
◉ Direct Labor (DL)
Answer: Labor costs of workers who directly convert materials into
finished products (e.g., assembly line workers).
QUESTIONS AND ANSWERS COMPLETE
STUDY GUIDE RESOURCE
◉ Integrity
Answer: Avoid conflicts of interest; refrain from activities that would
prejudice your ability to carry out duties ethically.
◉ Credibility
Answer: Communicate information fairly and objectively; disclose all
relevant information that could influence an intended user's
understanding.
◉ Cost
Answer: The monetary value of resources sacrificed or forgone to
achieve a specific objective.
◉ Cost Pool
Answer: A grouping of individual indirect costs. Example:
maintenance department costs pooled together before allocation.
◉ Cost Driver
,Answer: A factor that causes or influences a change in the total cost
of an activity.
◉ Cost Object
Answer: Anything to which costs are assigned — a product, service,
customer, department, or project.
◉ Cost Assignment
Answer: The process of assigning costs to cost pools or from cost
pools to cost objects (using direct tracing or allocation).
◉ Direct Costs
Answer: Can be economically traced directly to a cost object (e.g.,
lumber in a table, wages of assembly workers).
◉ Indirect Costs
Answer: Cannot be conveniently or economically traced to a specific
cost object; must be allocated (e.g., factory utilities, depreciation).
◉ Variable Costs
Answer: Change in TOTAL proportionally with changes in activity.
Constant on a PER UNIT basis. (e.g., direct materials, direct labor).
, ◉ Fixed Costs
Answer: Remain CONSTANT IN TOTAL regardless of activity level.
Change on a per unit basis (inversely). (e.g., rent, depreciation,
supervisor salaries).
◉ Mixed (Semi-Variable) Costs
Answer: Have BOTH a fixed component and a variable component
(e.g., a utility bill with a base charge plus usage rate).
◉ Product Costs
Answer: Costs attached to the product; flow through inventory until
sold. Includes DM, DL, and Manufacturing Overhead.
◉ Period Costs
Answer: Expensed in the period incurred; NOT inventoried. Includes
selling expenses, G&A expenses, advertising, etc.
◉ Direct Materials (DM)
Answer: Raw materials physically incorporated into the finished
product and traceable to it (e.g., steel in a car).
◉ Direct Labor (DL)
Answer: Labor costs of workers who directly convert materials into
finished products (e.g., assembly line workers).
