WGU C253 Advanced Managerial
Accounting exam with correct answers
Absorption |costing |- |ANSWERS✔✔ |A |costing |method |that |includes |all |manufacturing
|costs—direct |materials, |direct |labor, |and |both |variable |and |fixed |manufacturing
|overhead—in |unit |product |costs.
Activity |- |ANSWERS✔✔ |An |event |that |causes |the |consumption |of |overhead |resources |in |an
|organization.
Activity |base |- |ANSWERS✔✔ |A |measure |of |whatever |causes |the |incurrence |of |a |variable
|cost. |For |example, |the |total |cost |of |surgical |gloves |in |a |hospital |will |increase |as |the |number
|of |surgeries |increases. |Therefore, |the |number |of |surgeries |is |the |activity |base |that |explains
|the |total |cost |of |surgical |gloves.
Activity |cost |pool |- |ANSWERS✔✔ |A |"bucket" |in |which |costs |are |accumulated |that |relate |to |a
|single |activity |measure |in |an |activity-based |costing |system.
Activity |measure |- |ANSWERS✔✔ |An |allocation |base |in |an |activity-based |costing |system;
|ideally, |a |measure |of |the |amount |of |activity |that |drives |the |costs |in |an |activity |cost |pool.
Activity |variance |- |ANSWERS✔✔ |The |difference |between |a |revenue |or |cost |item |in |the
|flexible |budget |and |the |same |item |in |the |static |planning |budget. |An |activity |variance |is |due
|solely |to |the |difference |between |the |actual |level |of |activity |used |in |the |flexible |budget |and
|the |level |of |activity |assumed |in |the |planning |budget.
Activity-based |costing |(ABC) |- |ANSWERS✔✔ |A |costing |method |based |on |activities |that |is
|designed |to |provide |managers |with |cost |information |for |strategic |and |other |decisions |that
|potentially |affect |capacity |and |therefore |fixed |as |well |as |variable |costs.
,Activity-based |management |(ABM) |- |ANSWERS✔✔ |A |management |approach |that |focuses
|on |managing |activities |as |a |way |of |eliminating |waste |and |reducing |delays |and |defects.
Administrative |costs |- |ANSWERS✔✔ |All |executive, |organizational, |and |clerical |costs
|associated |with |the |general |management |of |an |organization |rather |than |with
|manufacturing |or |selling.
Allocation |base |- |ANSWERS✔✔ |A |measure |of |activity |such |as |direct |labor-hours |or
|machine-hours |that |is |used |to |assign |costs |to |cost |objects.
Avoidable |cost |- |ANSWERS✔✔ |A |cost |that |can |be |eliminated |by |choosing |one |alternative
|over |another |in |a |decision. |This |term |is |synonymous |with |differential |cost |and |relevant
|cost.
Batch-level |activities |- |ANSWERS✔✔ |Activities |that |are |performed |each |time |a |batch |of
|goods |is |handled |or |processed, |regardless |of |how |many |units |are |in |the |batch. |The |amount
|of |resource |consumed |depends |on |the |number |of |batches |run |rather |than |on |the |number |of
|units |in |the |batch.
Benchmarking |- |ANSWERS✔✔ |A |systematic |approach |to |identifying |the |activities |with |the
|greatest |potential |for |improvement.
Bill |of |materials |- |ANSWERS✔✔ |A |document |that |shows |the |quantity |of |each |type |of |direct
|material |required |to |make |a |product.
Bottleneck |- |ANSWERS✔✔ |A |machine |or |some |other |part |of |a |process |that |limits |the |total
|output |of |the |entire |system.
Break-even |point |- |ANSWERS✔✔ |The |level |of |sales |at |which |profit |is |zero.
, Budget |- |ANSWERS✔✔ |A |detailed |plan |for |the |future |that |is |usually |expressed |in |formal
|quantitative |terms.
Capital |budgeting |- |ANSWERS✔✔ |The |process |of |planning |significant |investments |in
|projects |that |have |long-term |implications |such |as |the |purchase |of |new |equipment |or |the
|introduction |of |a |new |product.
Cash |budget |- |ANSWERS✔✔ |A |detailed |plan |showing |how |cash |resources |will |be |acquired
|and |used |over |a |specific |time |period.
Committed |fixed |costs |- |ANSWERS✔✔ |Investments |in |facilities, |equipment, |and |basic
|organizational |structure |that |can't |be |significantly |reduced |even |for |short |periods |of |time
|without |making |fundamental |changes.
Common |cost |- |ANSWERS✔✔ |A |cost |that |is |incurred |to |support |a |number |of |cost |objects
|but |that |cannot |be |traced |to |them |individually. |For |example, |the |wage |cost |of |the |pilot |of |a
|747 |airliner |is |a |common |cost |of |all |of |the |passengers |on |the |aircraft. |Without |the |pilot,
|there |would |be |no |flight |and |no |passengers. |But |no |part |of |the |pilot's |wage |is |caused |by |any
|one |passenger |taking |the |flight.
Common |fixed |cost |- |ANSWERS✔✔ |A |fixed |cost |that |supports |more |than |one |business
|segment, |but |is |not |traceable |in |whole |or |in |part |to |any |one |of |the |business |segments.
Constraint |- |ANSWERS✔✔ |A |limitation |under |which |a |company |must |operate, |such |as
|limited |available |machine |time |or |raw |materials, |that |restricts |the |company's |ability |to
|satisfy |demand.
Contribution |approach |- |ANSWERS✔✔ |An |income |statement |format |that |organizes |costs |by
|their |behavior. |Costs |are |separated |into |variable |and |fixed |categories |rather |than |being
|separated |into |product |and |period |costs |for |external |reporting |purposes
Contribution |margin |- |ANSWERS✔✔ |The |amount |remaining |from |sales |revenues |after |all
|variable |expenses |have |been |deducted.
Accounting exam with correct answers
Absorption |costing |- |ANSWERS✔✔ |A |costing |method |that |includes |all |manufacturing
|costs—direct |materials, |direct |labor, |and |both |variable |and |fixed |manufacturing
|overhead—in |unit |product |costs.
Activity |- |ANSWERS✔✔ |An |event |that |causes |the |consumption |of |overhead |resources |in |an
|organization.
Activity |base |- |ANSWERS✔✔ |A |measure |of |whatever |causes |the |incurrence |of |a |variable
|cost. |For |example, |the |total |cost |of |surgical |gloves |in |a |hospital |will |increase |as |the |number
|of |surgeries |increases. |Therefore, |the |number |of |surgeries |is |the |activity |base |that |explains
|the |total |cost |of |surgical |gloves.
Activity |cost |pool |- |ANSWERS✔✔ |A |"bucket" |in |which |costs |are |accumulated |that |relate |to |a
|single |activity |measure |in |an |activity-based |costing |system.
Activity |measure |- |ANSWERS✔✔ |An |allocation |base |in |an |activity-based |costing |system;
|ideally, |a |measure |of |the |amount |of |activity |that |drives |the |costs |in |an |activity |cost |pool.
Activity |variance |- |ANSWERS✔✔ |The |difference |between |a |revenue |or |cost |item |in |the
|flexible |budget |and |the |same |item |in |the |static |planning |budget. |An |activity |variance |is |due
|solely |to |the |difference |between |the |actual |level |of |activity |used |in |the |flexible |budget |and
|the |level |of |activity |assumed |in |the |planning |budget.
Activity-based |costing |(ABC) |- |ANSWERS✔✔ |A |costing |method |based |on |activities |that |is
|designed |to |provide |managers |with |cost |information |for |strategic |and |other |decisions |that
|potentially |affect |capacity |and |therefore |fixed |as |well |as |variable |costs.
,Activity-based |management |(ABM) |- |ANSWERS✔✔ |A |management |approach |that |focuses
|on |managing |activities |as |a |way |of |eliminating |waste |and |reducing |delays |and |defects.
Administrative |costs |- |ANSWERS✔✔ |All |executive, |organizational, |and |clerical |costs
|associated |with |the |general |management |of |an |organization |rather |than |with
|manufacturing |or |selling.
Allocation |base |- |ANSWERS✔✔ |A |measure |of |activity |such |as |direct |labor-hours |or
|machine-hours |that |is |used |to |assign |costs |to |cost |objects.
Avoidable |cost |- |ANSWERS✔✔ |A |cost |that |can |be |eliminated |by |choosing |one |alternative
|over |another |in |a |decision. |This |term |is |synonymous |with |differential |cost |and |relevant
|cost.
Batch-level |activities |- |ANSWERS✔✔ |Activities |that |are |performed |each |time |a |batch |of
|goods |is |handled |or |processed, |regardless |of |how |many |units |are |in |the |batch. |The |amount
|of |resource |consumed |depends |on |the |number |of |batches |run |rather |than |on |the |number |of
|units |in |the |batch.
Benchmarking |- |ANSWERS✔✔ |A |systematic |approach |to |identifying |the |activities |with |the
|greatest |potential |for |improvement.
Bill |of |materials |- |ANSWERS✔✔ |A |document |that |shows |the |quantity |of |each |type |of |direct
|material |required |to |make |a |product.
Bottleneck |- |ANSWERS✔✔ |A |machine |or |some |other |part |of |a |process |that |limits |the |total
|output |of |the |entire |system.
Break-even |point |- |ANSWERS✔✔ |The |level |of |sales |at |which |profit |is |zero.
, Budget |- |ANSWERS✔✔ |A |detailed |plan |for |the |future |that |is |usually |expressed |in |formal
|quantitative |terms.
Capital |budgeting |- |ANSWERS✔✔ |The |process |of |planning |significant |investments |in
|projects |that |have |long-term |implications |such |as |the |purchase |of |new |equipment |or |the
|introduction |of |a |new |product.
Cash |budget |- |ANSWERS✔✔ |A |detailed |plan |showing |how |cash |resources |will |be |acquired
|and |used |over |a |specific |time |period.
Committed |fixed |costs |- |ANSWERS✔✔ |Investments |in |facilities, |equipment, |and |basic
|organizational |structure |that |can't |be |significantly |reduced |even |for |short |periods |of |time
|without |making |fundamental |changes.
Common |cost |- |ANSWERS✔✔ |A |cost |that |is |incurred |to |support |a |number |of |cost |objects
|but |that |cannot |be |traced |to |them |individually. |For |example, |the |wage |cost |of |the |pilot |of |a
|747 |airliner |is |a |common |cost |of |all |of |the |passengers |on |the |aircraft. |Without |the |pilot,
|there |would |be |no |flight |and |no |passengers. |But |no |part |of |the |pilot's |wage |is |caused |by |any
|one |passenger |taking |the |flight.
Common |fixed |cost |- |ANSWERS✔✔ |A |fixed |cost |that |supports |more |than |one |business
|segment, |but |is |not |traceable |in |whole |or |in |part |to |any |one |of |the |business |segments.
Constraint |- |ANSWERS✔✔ |A |limitation |under |which |a |company |must |operate, |such |as
|limited |available |machine |time |or |raw |materials, |that |restricts |the |company's |ability |to
|satisfy |demand.
Contribution |approach |- |ANSWERS✔✔ |An |income |statement |format |that |organizes |costs |by
|their |behavior. |Costs |are |separated |into |variable |and |fixed |categories |rather |than |being
|separated |into |product |and |period |costs |for |external |reporting |purposes
Contribution |margin |- |ANSWERS✔✔ |The |amount |remaining |from |sales |revenues |after |all
|variable |expenses |have |been |deducted.
