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ACC 241 Exam 1 | Questions and Answers
| 2026 Updated | 100% Correct.
Direct Costs - - ANS✔️--A cost that can be directly related to producing specific goods or
performing a specific
service.
Indirect Costs - - ANS✔️--Manufacturing cost that cannot be easily seen in the product.
Electricity, hazard insurance on the factory building, and real estate taxes are examples of
indirect costs.
Inventoriable Costs (Direct Material, Direct Labor, and Manufacturing Overhead) - - ANS✔️--All
costs of a product that are recorded as an asset (inventory) under US GAAP (direct materials,
direct labor and manufacturing overhead). These costs are not expensed until the related product
is sold.
Period Costs - - ANS✔️--Expenses recognized as costs in the period in which they were incurred;
often referred to
as operating expenses, or selling, general and administrative expenses.
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Prime Costs vs Conversion Costs - - ANS✔️--PC - The sum of direct material and direct labor
costs.
CC - The combined total of direct labor cost and manufacturing overhead incurred in processing
raw materials to a finished state.
Controllable Costs vs Uncontrollable Costs - - ANS✔️--CC - Expenditures that are subject to the
discretion of a manager and, hence, can be kept within predefined limits.
UC -
Relevant Costs vs Irrelevant Costs - - ANS✔️--R - Are considered when allocating a price
IR - are unnecessary when allocating price
Fixed Costs vs Variable Costs - - ANS✔️--FC - A cost that does not vary depending on
production or sales levels, such as rent, property tax, insurance, or interest expense.
VC - A cost that is directly proportional to the volume of output produced.
Process Costing vs Job Costing - - ANS✔️--PC - The process of allocating costs to products by
averaging costs over large numbers of identical products that pass through a series of uniform
production steps.
JC - A system used for assigning costs to products or services that differ in the amount of
materials, labor and overhead required. Typically used by manufacturers that produce unique or
custom- ordered products in small batches.
ACC 241 Exam 1 | Questions and Answers
| 2026 Updated | 100% Correct.
Direct Costs - - ANS✔️--A cost that can be directly related to producing specific goods or
performing a specific
service.
Indirect Costs - - ANS✔️--Manufacturing cost that cannot be easily seen in the product.
Electricity, hazard insurance on the factory building, and real estate taxes are examples of
indirect costs.
Inventoriable Costs (Direct Material, Direct Labor, and Manufacturing Overhead) - - ANS✔️--All
costs of a product that are recorded as an asset (inventory) under US GAAP (direct materials,
direct labor and manufacturing overhead). These costs are not expensed until the related product
is sold.
Period Costs - - ANS✔️--Expenses recognized as costs in the period in which they were incurred;
often referred to
as operating expenses, or selling, general and administrative expenses.
, 2|Page
Prime Costs vs Conversion Costs - - ANS✔️--PC - The sum of direct material and direct labor
costs.
CC - The combined total of direct labor cost and manufacturing overhead incurred in processing
raw materials to a finished state.
Controllable Costs vs Uncontrollable Costs - - ANS✔️--CC - Expenditures that are subject to the
discretion of a manager and, hence, can be kept within predefined limits.
UC -
Relevant Costs vs Irrelevant Costs - - ANS✔️--R - Are considered when allocating a price
IR - are unnecessary when allocating price
Fixed Costs vs Variable Costs - - ANS✔️--FC - A cost that does not vary depending on
production or sales levels, such as rent, property tax, insurance, or interest expense.
VC - A cost that is directly proportional to the volume of output produced.
Process Costing vs Job Costing - - ANS✔️--PC - The process of allocating costs to products by
averaging costs over large numbers of identical products that pass through a series of uniform
production steps.
JC - A system used for assigning costs to products or services that differ in the amount of
materials, labor and overhead required. Typically used by manufacturers that produce unique or
custom- ordered products in small batches.
