WGU C213 Final Exam: ACCOUNTING FOR DECISION MAKERS
Questions And Answers (2026/2027) Verified
EXAM
1. During a high-priority assessment, the practitioner must select the best answer. A flexible
budget adjusts expected costs for the actual activity level; what is its primary purpose?
A. to guarantee favorable variances
B. to replace financial statements
C. to eliminate all fixed costs
✓ D. to improve performance evaluation by comparing costs with an appropriate activity level
Rationale: A flexible budget provides a more meaningful benchmark because it adjusts for actual activity.
2. During a high-priority assessment, careful prioritization is required. A favorable
direct-material price variance occurs when the actual purchase price is lower than the standard
price; what does this indicate?
✓ A. actual material cost per unit was below the standard price
B. actual price exceeded standard price
C. labor efficiency improved
D. usage was necessarily unfavorable
Rationale: Price variance compares the actual purchase price with the standard price; a lower actual price
produces a favorable variance.
3. During a high-priority assessment, a cost that has already been incurred and cannot be
changed is classified as what for a future decision?
A. an incremental cost
✓ B. a sunk cost
C. a differential future cost
D. an opportunity cost
,Rationale: Sunk costs have already occurred and cannot be changed, so they should not affect most future
decisions.
4. During a high-priority assessment, the practitioner must select the best answer. A company
must choose between making a component internally or buying it; which factor is most
important?
A. the original purchase price of equipment
B. all allocated fixed costs regardless of avoidability
C. past costs already incurred
✓ D. avoidable internal costs compared with the supplier's purchase price
Rationale: Make-or-buy decisions should compare relevant avoidable internal costs with the supplier's purchase
price.
5. During a high-priority assessment, careful prioritization is required. A manager gives up a
contribution margin by using limited machine time for one product instead of another; what is
this forgone benefit called?
A. fixed overhead
B. historical cost
✓ C. opportunity cost
D. sunk cost
Rationale: Opportunity cost is the benefit sacrificed by choosing one alternative over the next-best alternative.
6. During a high-priority assessment, a manager is deciding whether to accept a special order
when spare capacity exists; which costs are most relevant to the decision?
A. historical costs that cannot change
B. sunk costs only
✓ C. incremental costs and incremental revenues
D. allocated corporate costs regardless of decision
Rationale: Relevant costs are future costs that differ between alternatives; incremental revenue and incremental
cost are therefore central.
,7. During a high-priority assessment, the practitioner must select the best answer. A product
has a contribution margin of $30 per unit and fixed costs of $60,000; what is the break-even
volume?
A. 1,000 units
B. 3,000 units
C. 500 units
✓ D. 2,000 units
Rationale: Break-even units equal fixed costs divided by contribution margin per unit: $60,000 ÷ $30 = 2,000
units.
8. During a high-priority assessment, careful prioritization is required. A fixed cost is relevant to
a decision when which condition is present?
A. the cost was incurred last year
B. the cost is always identical under every alternative
C. the cost is already unavoidable
✓ D. the cost changes as a result of the decision
Rationale: A cost matters to a decision when it is future-oriented and differs among alternatives.
9. During a high-priority assessment, a manager compares operating income at different sales
volumes; which measure is most useful for understanding sensitivity to volume?
A. bank reconciliation only
B. accounts payable aging only
C. depreciation schedule only
✓ D. cost-volume-profit analysis
Rationale: Cost-volume-profit analysis examines how changes in volume, price, variable cost, and fixed cost
affect profit.
10. During a high-priority assessment, the practitioner must select the best answer. A division's
ROI falls after a manager rejects a project whose return exceeds the company's required return;
what behavioral problem may be occurring?
, A. the company has no opportunity cost
B. the project has no incremental revenue
C. ROI always increases when assets increase
✓ D. the manager is protecting divisional ROI at the expense of overall company value
Rationale: ROI-based incentives can cause managers to reject profitable investments when those investments
lower the division's average ROI.
11. A clinician is reviewing a new case when careful prioritization is required. A favorable
direct-material price variance occurs when the actual purchase price is lower than the standard
price; what does this indicate?
✓ A. actual material cost per unit was below the standard price
B. actual price exceeded standard price
C. labor efficiency improved
D. usage was necessarily unfavorable
Rationale: Price variance compares the actual purchase price with the standard price; a lower actual price
produces a favorable variance.
12. A clinician is reviewing a new case when a manager compares operating income at different
sales volumes; which measure is most useful for understanding sensitivity to volume?
A. depreciation schedule only
B. bank reconciliation only
C. accounts payable aging only
✓ D. cost-volume-profit analysis
Rationale: Cost-volume-profit analysis examines how changes in volume, price, variable cost, and fixed cost
affect profit.
13. A clinician is reviewing a new case when the practitioner must select the best answer. A
division's ROI falls after a manager rejects a project whose return exceeds the company's
required return; what behavioral problem may be occurring?
A. ROI always increases when assets increase
Questions And Answers (2026/2027) Verified
EXAM
1. During a high-priority assessment, the practitioner must select the best answer. A flexible
budget adjusts expected costs for the actual activity level; what is its primary purpose?
A. to guarantee favorable variances
B. to replace financial statements
C. to eliminate all fixed costs
✓ D. to improve performance evaluation by comparing costs with an appropriate activity level
Rationale: A flexible budget provides a more meaningful benchmark because it adjusts for actual activity.
2. During a high-priority assessment, careful prioritization is required. A favorable
direct-material price variance occurs when the actual purchase price is lower than the standard
price; what does this indicate?
✓ A. actual material cost per unit was below the standard price
B. actual price exceeded standard price
C. labor efficiency improved
D. usage was necessarily unfavorable
Rationale: Price variance compares the actual purchase price with the standard price; a lower actual price
produces a favorable variance.
3. During a high-priority assessment, a cost that has already been incurred and cannot be
changed is classified as what for a future decision?
A. an incremental cost
✓ B. a sunk cost
C. a differential future cost
D. an opportunity cost
,Rationale: Sunk costs have already occurred and cannot be changed, so they should not affect most future
decisions.
4. During a high-priority assessment, the practitioner must select the best answer. A company
must choose between making a component internally or buying it; which factor is most
important?
A. the original purchase price of equipment
B. all allocated fixed costs regardless of avoidability
C. past costs already incurred
✓ D. avoidable internal costs compared with the supplier's purchase price
Rationale: Make-or-buy decisions should compare relevant avoidable internal costs with the supplier's purchase
price.
5. During a high-priority assessment, careful prioritization is required. A manager gives up a
contribution margin by using limited machine time for one product instead of another; what is
this forgone benefit called?
A. fixed overhead
B. historical cost
✓ C. opportunity cost
D. sunk cost
Rationale: Opportunity cost is the benefit sacrificed by choosing one alternative over the next-best alternative.
6. During a high-priority assessment, a manager is deciding whether to accept a special order
when spare capacity exists; which costs are most relevant to the decision?
A. historical costs that cannot change
B. sunk costs only
✓ C. incremental costs and incremental revenues
D. allocated corporate costs regardless of decision
Rationale: Relevant costs are future costs that differ between alternatives; incremental revenue and incremental
cost are therefore central.
,7. During a high-priority assessment, the practitioner must select the best answer. A product
has a contribution margin of $30 per unit and fixed costs of $60,000; what is the break-even
volume?
A. 1,000 units
B. 3,000 units
C. 500 units
✓ D. 2,000 units
Rationale: Break-even units equal fixed costs divided by contribution margin per unit: $60,000 ÷ $30 = 2,000
units.
8. During a high-priority assessment, careful prioritization is required. A fixed cost is relevant to
a decision when which condition is present?
A. the cost was incurred last year
B. the cost is always identical under every alternative
C. the cost is already unavoidable
✓ D. the cost changes as a result of the decision
Rationale: A cost matters to a decision when it is future-oriented and differs among alternatives.
9. During a high-priority assessment, a manager compares operating income at different sales
volumes; which measure is most useful for understanding sensitivity to volume?
A. bank reconciliation only
B. accounts payable aging only
C. depreciation schedule only
✓ D. cost-volume-profit analysis
Rationale: Cost-volume-profit analysis examines how changes in volume, price, variable cost, and fixed cost
affect profit.
10. During a high-priority assessment, the practitioner must select the best answer. A division's
ROI falls after a manager rejects a project whose return exceeds the company's required return;
what behavioral problem may be occurring?
, A. the company has no opportunity cost
B. the project has no incremental revenue
C. ROI always increases when assets increase
✓ D. the manager is protecting divisional ROI at the expense of overall company value
Rationale: ROI-based incentives can cause managers to reject profitable investments when those investments
lower the division's average ROI.
11. A clinician is reviewing a new case when careful prioritization is required. A favorable
direct-material price variance occurs when the actual purchase price is lower than the standard
price; what does this indicate?
✓ A. actual material cost per unit was below the standard price
B. actual price exceeded standard price
C. labor efficiency improved
D. usage was necessarily unfavorable
Rationale: Price variance compares the actual purchase price with the standard price; a lower actual price
produces a favorable variance.
12. A clinician is reviewing a new case when a manager compares operating income at different
sales volumes; which measure is most useful for understanding sensitivity to volume?
A. depreciation schedule only
B. bank reconciliation only
C. accounts payable aging only
✓ D. cost-volume-profit analysis
Rationale: Cost-volume-profit analysis examines how changes in volume, price, variable cost, and fixed cost
affect profit.
13. A clinician is reviewing a new case when the practitioner must select the best answer. A
division's ROI falls after a manager rejects a project whose return exceeds the company's
required return; what behavioral problem may be occurring?
A. ROI always increases when assets increase
