WGU D196 TEST BANK FOR OA AND PRE -ASSESSMENT
REVIEW 2025/2026 WITH 250 ACTUAL EXAM QUESTIONS
AND CORRECT ANSWERS (100% CORRECT ANSWERS)
GRADED A+
1. Which is an example of a product cost?
a. Non-manufacturing personnel costs
b. Rent Expense
c. Office Supplies
d. Raw materials to make a product - Correct Answer - d
2. Which label is given to the cost of wages for factory supervisors?
a. Direct labor
b. Direct materials
c. Manufacturing overhead
d. Administrative expenses - Correct Answer - c
3. A company reports the following data: Price per unit = $20 Variable costs per unit =
$12 Fixed costs = $12,000 Given these data, what is the variable cost ratio?
a. 40%
b. 25%
c. 16%
d. 60% - Correct Answer - d
4. If overhead is underapplied, which statement is true?
a. Actual costs exceed applied costs
pg. 1
,b. Applied costs exceed actual costs
c. Costs will not be affected
d. Budgeted and applied costs will be equal - Correct Answer - a
5. Which of the following is not an example of a cost driver?
a. Miles driven
b. Selling costs
c. Machine hours
d. Number of customers - Correct Answer - b
6. Which item is a period cost?
a. Manufacturing supplies
b. Overhead directly tied to the production facility
c. Raw materials
d. Marketing expense - Correct Answer - d
7. Which overhead allocation method should be used for a trash bag manufacturer?
a. Product-line costing
b. Process costing
c. ABC costing
d . Job order costing - Correct Answer - b
8. For relevant range, which costs are approximately linear within a certain range of
production?
a. Fixed costs
b. Variable costs
c. Stepped costs
d. Mixed costs - Correct Answer - b
pg. 2
,9. Which of the following focuses on how a company's activity levels impact profits?
a. Job order costing
b. Cost-Volume-Profit Analysis
c. Overhead cost allocation
d. Process costing - Correct Answer - b
10. Which overhead allocation method should be used for a automobile repair shop?
a. Product-line costing
b. Process costing
c. ABC costing
d. Job order costing - Correct Answer - d
11. What is an example of indirect labor?
a. Factory supervisors wages
b. Security guard wages
c. Maintenance staff wages
d. All of the above are examples of indirect labor - Correct Answer - d
12. Which of the following is an example of an indirect material?
a. Timber used to construct a house
b. The grease used on machines that manufacture products
c. The fabric used to assemble clothing
d. The circuit board included in a radio - Correct Answer - b
13. Which of the following is not an operating expense?
a. Advertising and marketing
b. Office supplies
c. Utilities
pg. 3
, d. Income taxes - Correct Answer - d
14. A company reports the following data:
Total sales revenue = $275,000
Number of units sold = 25,000 units
Variable costs = $100,000
If the company is operating at its break-even point, what is the company's total
contribution margin?
a.$250,000
b.$175,000
c.$150,000
d. $125,000 - Correct Answer - b
15. How are period costs reported on an income statement?
a. As revenue
b. As an expense
c. As cost of goods sold
d. As an asset - Correct Answer - b
16. Which item is an example of a controllable cost?
a. Advertising costs
b. Rent expense
c. Depreciation
d. Customer tastes and economic conditions - Correct Answer - a
17. A company purchases equipment with a note payable. How does this transaction
affect the paying company's accounting equation?
a. Asset increases; Liability increases
b. Asset increases; Asset decreases
pg. 4
REVIEW 2025/2026 WITH 250 ACTUAL EXAM QUESTIONS
AND CORRECT ANSWERS (100% CORRECT ANSWERS)
GRADED A+
1. Which is an example of a product cost?
a. Non-manufacturing personnel costs
b. Rent Expense
c. Office Supplies
d. Raw materials to make a product - Correct Answer - d
2. Which label is given to the cost of wages for factory supervisors?
a. Direct labor
b. Direct materials
c. Manufacturing overhead
d. Administrative expenses - Correct Answer - c
3. A company reports the following data: Price per unit = $20 Variable costs per unit =
$12 Fixed costs = $12,000 Given these data, what is the variable cost ratio?
a. 40%
b. 25%
c. 16%
d. 60% - Correct Answer - d
4. If overhead is underapplied, which statement is true?
a. Actual costs exceed applied costs
pg. 1
,b. Applied costs exceed actual costs
c. Costs will not be affected
d. Budgeted and applied costs will be equal - Correct Answer - a
5. Which of the following is not an example of a cost driver?
a. Miles driven
b. Selling costs
c. Machine hours
d. Number of customers - Correct Answer - b
6. Which item is a period cost?
a. Manufacturing supplies
b. Overhead directly tied to the production facility
c. Raw materials
d. Marketing expense - Correct Answer - d
7. Which overhead allocation method should be used for a trash bag manufacturer?
a. Product-line costing
b. Process costing
c. ABC costing
d . Job order costing - Correct Answer - b
8. For relevant range, which costs are approximately linear within a certain range of
production?
a. Fixed costs
b. Variable costs
c. Stepped costs
d. Mixed costs - Correct Answer - b
pg. 2
,9. Which of the following focuses on how a company's activity levels impact profits?
a. Job order costing
b. Cost-Volume-Profit Analysis
c. Overhead cost allocation
d. Process costing - Correct Answer - b
10. Which overhead allocation method should be used for a automobile repair shop?
a. Product-line costing
b. Process costing
c. ABC costing
d. Job order costing - Correct Answer - d
11. What is an example of indirect labor?
a. Factory supervisors wages
b. Security guard wages
c. Maintenance staff wages
d. All of the above are examples of indirect labor - Correct Answer - d
12. Which of the following is an example of an indirect material?
a. Timber used to construct a house
b. The grease used on machines that manufacture products
c. The fabric used to assemble clothing
d. The circuit board included in a radio - Correct Answer - b
13. Which of the following is not an operating expense?
a. Advertising and marketing
b. Office supplies
c. Utilities
pg. 3
, d. Income taxes - Correct Answer - d
14. A company reports the following data:
Total sales revenue = $275,000
Number of units sold = 25,000 units
Variable costs = $100,000
If the company is operating at its break-even point, what is the company's total
contribution margin?
a.$250,000
b.$175,000
c.$150,000
d. $125,000 - Correct Answer - b
15. How are period costs reported on an income statement?
a. As revenue
b. As an expense
c. As cost of goods sold
d. As an asset - Correct Answer - b
16. Which item is an example of a controllable cost?
a. Advertising costs
b. Rent expense
c. Depreciation
d. Customer tastes and economic conditions - Correct Answer - a
17. A company purchases equipment with a note payable. How does this transaction
affect the paying company's accounting equation?
a. Asset increases; Liability increases
b. Asset increases; Asset decreases
pg. 4
