WGU D101 Cost and Managerial Accounting Exam with complete verified solutions 2024

What is a price taker? A company that has to accept the price that the market sets for a good. They have no influence over setting the price. What is a price maker? a firm possessing the power to set the price within the market. They still need to track all costs in order to make sure they are making an adequate return. What is the major purpose and use of job order costing? a. To create a system that tracks both manufacturing and period costs and assigns both to products b. To create a system in which manufacturing costs are tracked by period instead of by products c. To create a system in which manufacturing costs are accumulated by separate product orders or batches d. To create a system that is exclusively used by price makers and not by price takers c. Which statement is true? a. Having accurate product or service cost information is important for both price takers and price makers. b. Having accurate product or service cost information is important for price takers, but not price makers. c. Having accurate produce or service cost information is not important for either price takers or price makers. d. Having accurate product or service cost information is important for price makers, but not price takers. a. Two competitors exist in the same industry. The first company has accurate product cost information while the second company does not. What is the reason behind why the first company is more successful than the second? a. With accurate job cost information, the first company can undercut the second company's prices, thus driving the second company out of business. b. With accurate job cost information, the first company can set prices that guarantee making a profit, can understand which costs need to be worked on, and can determine which actions can be taken to make the company more efficient and profitable. c. With accurate job cost information, the first company can pay higher wages to employees, thus motivating them more than the employees of the second company. d. With accurate job cost information, the first company can set prices higher than the second company, thus earning higher profits. b. Job order costing is appropriate when which two conditions exist? a. Products produced are all the same, and the manufacturing processes used to produce them are the same. b. Products produced are distinct from each other, and the manufacturing processes used are different for different products. c. Products produced are distinct, but the manufacturing processes used are the same for different products. d. Products produced are all the same, but the manufacturing processes used to produce them are different for different products. b. Why is having accurate product cost information important? a. So manufacturers can charge a price based on costs and a reasonable markup b. So companies can minimize the profits they are earning c. So manufacturers can charge a price based on estimated product costs, not including a reasonable markup d. So companies can grow faster than all competitors in their industry a. Which type of company should use job order costing? a. Air filter manufacturer b. Soda bottler c. Paper towel manufacturer d. Commercial aircraft manufacturer d. What is a condition to using job order costing? a. Tracking total direct materials for a given period of time b. Having no manufacturing overhead assigned to the product cost c. Tracking total direct labor costs for a period of time d. Identifying each specific job or product manufactured d. Which costs should be assigned to each product under a job order costing system? a. Direct materials, direct labor, and manufacturing overhead b. Direct labor, manufacturing overhead, and administrative expenses c. Direct materials, direct labor, and administrative expenses d. Manufacturing overhead, administrative expenses, and depreciation of office buildings a. Which company should use a job ordering costing system? a. Manufacturer of custom furniture b. Manufacturer of paint c. Food processing plant d. Loan processing firm a. The profitability of each separate job or product can only be tracked using which product costing system? a. Process costing b. Average unit costing c. Profitability costing d. Job order costing d. In completing its job order costing journal entries, ABC Company's accountants made a credit entry to finished goods inventory. When is this entry made? a. When work-in-process inventory is transferred to finished goods inventory b. When finished goods inventory is sold c. When the cost of goods manufactured is being calculated d. When manufacturing overhead costs are applied to products being made b. Which account are the costs of the raw materials, direct labor, and miscellaneous manufacturing overhead transferred to when the product is being manufactured? a. Finished goods inventory b. Cost of goods sold c. Work-in-process inventory d. Direct materials c.