WGU D101 Cost & Managerial Accounting
OA: 200 Verified Questions & Answers with
Rationales. Master Job Order, Process,
ABC, CVP, Budgeting, Variance Analysis,
and Decision-Making for Exam Success.
Core Concepts & Cost Classification
1. What is a "price taker" in cost
accounting?
A) A firm that can set its own prices
B) Accepts the market price set externally
C) Ignores market prices for decision-
making
D) A company that sells luxury goods
☑VERIFIED ANSWER: B
Rationale: Price takers operate in highly
competitive markets and have no influence
,over the selling price; they must accept the
price determined by market forces .
2. Which of the following is a characteristic
of a fixed cost?
A) It changes in total with changes in
activity.
B) It remains constant in total within the
relevant range.
C) It changes per unit with changes in
activity.
D) It has both fixed and variable
components.
☑VERIFIED ANSWER: B
Rationale: Fixed costs are costs that do not
change in total as activity levels change, at
least within a certain range of activity (the
relevant range) .
,3. Prime costs consist of:
A) Direct labor and manufacturing
overhead.
B) Direct materials and direct labor.
C) Direct materials and manufacturing
overhead.
D) Only direct materials.
☑VERIFIED ANSWER: B
Rationale: Prime costs are the primary costs
directly attributable to a product and are
the sum of direct materials and direct
labor .
4. Which cost is an example of a period
cost?
A) Depreciation on factory equipment.
B) Wages of assembly line workers.
C) Sales commissions.
, D) Raw materials used in production.
☑VERIFIED ANSWER: C
Rationale: Period costs are expensed in the
period incurred and are not associated with
the manufacturing of a product. Sales
commissions and administrative salaries are
examples .
Job Order & Process Costing
5. Which of the following companies would
most likely use a job order costing system?
A) A paper towel manufacturer.
B) A soda bottling company.
C) A custom furniture manufacturer.
D) An oil refinery.
☑VERIFIED ANSWER: C
OA: 200 Verified Questions & Answers with
Rationales. Master Job Order, Process,
ABC, CVP, Budgeting, Variance Analysis,
and Decision-Making for Exam Success.
Core Concepts & Cost Classification
1. What is a "price taker" in cost
accounting?
A) A firm that can set its own prices
B) Accepts the market price set externally
C) Ignores market prices for decision-
making
D) A company that sells luxury goods
☑VERIFIED ANSWER: B
Rationale: Price takers operate in highly
competitive markets and have no influence
,over the selling price; they must accept the
price determined by market forces .
2. Which of the following is a characteristic
of a fixed cost?
A) It changes in total with changes in
activity.
B) It remains constant in total within the
relevant range.
C) It changes per unit with changes in
activity.
D) It has both fixed and variable
components.
☑VERIFIED ANSWER: B
Rationale: Fixed costs are costs that do not
change in total as activity levels change, at
least within a certain range of activity (the
relevant range) .
,3. Prime costs consist of:
A) Direct labor and manufacturing
overhead.
B) Direct materials and direct labor.
C) Direct materials and manufacturing
overhead.
D) Only direct materials.
☑VERIFIED ANSWER: B
Rationale: Prime costs are the primary costs
directly attributable to a product and are
the sum of direct materials and direct
labor .
4. Which cost is an example of a period
cost?
A) Depreciation on factory equipment.
B) Wages of assembly line workers.
C) Sales commissions.
, D) Raw materials used in production.
☑VERIFIED ANSWER: C
Rationale: Period costs are expensed in the
period incurred and are not associated with
the manufacturing of a product. Sales
commissions and administrative salaries are
examples .
Job Order & Process Costing
5. Which of the following companies would
most likely use a job order costing system?
A) A paper towel manufacturer.
B) A soda bottling company.
C) A custom furniture manufacturer.
D) An oil refinery.
☑VERIFIED ANSWER: C
