WGU D196 ALL EXAM QUESTIONS WITH VERIFIED
ANSWERS
Which of the following statements is correct concerning ABC overhead
assignment?
Overhead is assigned based on more than one activity measure.
For some manufacturing processes, job order costing is the correct production
cost accumulation system. For other processes, process costing is appropriate.
For which of the following products does process more properly apply?
Manufacturing identical residential refrigerators
In an activity-based costing system, what is a cost pool?
Accumulation of overhead costs that are associated with a specific overhead
cost activity
Sara is concerned about her company's costing system. She believes the system
is over-costing its generic, simple products and under-costing its custom-
designed, complex products. The current overhead allocation system is very
traditional where overhead is applied based solely on the number of direct labor
hours.
Activity-based costing
,How does an ABC system calculate an activity rate?
Cost pool divided by the number of cost driver events
For certain production processes, job order costing is the appropriate production
costing system to use. With other production processes, process costing is a
better fit. For which process is process costing more appropriate?
Producing identical cans of paint
What does direct materials cost include?
The cost of raw materials that are used directly in the production of products
What is manufacturing overhead?
All manufacturing costs that are not classified as either direct materials or direct
labor
In an ABC system, how are the costs belonging to a cost pool identified?
By carefully analyzing what activities cause the need for each specific overhead
cost
How is overhead applied in an ABC system?
Overhead per cost driver times number of cost driver events
Companies that use process costing do not determine the individual cost for
each specific job or order being manufactured. Instead, these companies
calculate costs based upon another criterion. What is it?
Cost incurred related to work performed during a specific time interval
Which of the following terms best describes job order costing?
,A system in which manufacturing costs are accumulated by separate product
orders or batches (a method where production expenses are added up by various
product orders or batches)
When is job order costing NOT appropriate?
When a firm manufactures products or services in a continuous process in
which jobs or products or projects can't be specifically identified
When a business engages in continuous production of goods or services while
making it impossible to identify individual goods, or projects
What is the classification of factory supervisor wages in a job order costing
system?
Overhead-control
What is a period cost?
A cost that is incurred outside the factory
One important result of using an ABC system is more accurate product costing.
What is another important result of using an ABC system?
Better decisions made
An ABC overhead allocation system is not always substantially better than a
traditional system. When does a traditional overhead allocation system work
well?
When the production process for each different product or project or process is
basically the same
, We have an expert-written solution to this problem!
What is process costing?
A method of product costing in which costs are accumulated by process and
averaged over all products made during a period
What are the three categories of manufacturing costs?
Direct materials, direct labor, and manufacturing overhead
Eva has been assigned the task of updating the old job order costing system for
Gold Leaf. Among many of the initial observations Eva makes are some items
that are not recorded correctly. For example, the flow of costs according to
accounting does not match up with the actual flow of costs in the production
facility. The raw materials inventory, for example, are placed after the finished
goods inventory, which is not correct. This is one of the first things Eva would
like to change.
In what order should Eva accumulate the flow of material costs through the rest
of the production process?
Raw materials inventory, work-in-process inventory, finished goods inventory,
cost of goods sold
***
Based on the job order cost accounting plan, Eva wants to present an alternative
approach for Gold Leaf Trophies. She is now interested in determining how
much it costs to produce each order received by the company for customized
manufactured trophies. Eva can easily trace the direct materials and the direct
ANSWERS
Which of the following statements is correct concerning ABC overhead
assignment?
Overhead is assigned based on more than one activity measure.
For some manufacturing processes, job order costing is the correct production
cost accumulation system. For other processes, process costing is appropriate.
For which of the following products does process more properly apply?
Manufacturing identical residential refrigerators
In an activity-based costing system, what is a cost pool?
Accumulation of overhead costs that are associated with a specific overhead
cost activity
Sara is concerned about her company's costing system. She believes the system
is over-costing its generic, simple products and under-costing its custom-
designed, complex products. The current overhead allocation system is very
traditional where overhead is applied based solely on the number of direct labor
hours.
Activity-based costing
,How does an ABC system calculate an activity rate?
Cost pool divided by the number of cost driver events
For certain production processes, job order costing is the appropriate production
costing system to use. With other production processes, process costing is a
better fit. For which process is process costing more appropriate?
Producing identical cans of paint
What does direct materials cost include?
The cost of raw materials that are used directly in the production of products
What is manufacturing overhead?
All manufacturing costs that are not classified as either direct materials or direct
labor
In an ABC system, how are the costs belonging to a cost pool identified?
By carefully analyzing what activities cause the need for each specific overhead
cost
How is overhead applied in an ABC system?
Overhead per cost driver times number of cost driver events
Companies that use process costing do not determine the individual cost for
each specific job or order being manufactured. Instead, these companies
calculate costs based upon another criterion. What is it?
Cost incurred related to work performed during a specific time interval
Which of the following terms best describes job order costing?
,A system in which manufacturing costs are accumulated by separate product
orders or batches (a method where production expenses are added up by various
product orders or batches)
When is job order costing NOT appropriate?
When a firm manufactures products or services in a continuous process in
which jobs or products or projects can't be specifically identified
When a business engages in continuous production of goods or services while
making it impossible to identify individual goods, or projects
What is the classification of factory supervisor wages in a job order costing
system?
Overhead-control
What is a period cost?
A cost that is incurred outside the factory
One important result of using an ABC system is more accurate product costing.
What is another important result of using an ABC system?
Better decisions made
An ABC overhead allocation system is not always substantially better than a
traditional system. When does a traditional overhead allocation system work
well?
When the production process for each different product or project or process is
basically the same
, We have an expert-written solution to this problem!
What is process costing?
A method of product costing in which costs are accumulated by process and
averaged over all products made during a period
What are the three categories of manufacturing costs?
Direct materials, direct labor, and manufacturing overhead
Eva has been assigned the task of updating the old job order costing system for
Gold Leaf. Among many of the initial observations Eva makes are some items
that are not recorded correctly. For example, the flow of costs according to
accounting does not match up with the actual flow of costs in the production
facility. The raw materials inventory, for example, are placed after the finished
goods inventory, which is not correct. This is one of the first things Eva would
like to change.
In what order should Eva accumulate the flow of material costs through the rest
of the production process?
Raw materials inventory, work-in-process inventory, finished goods inventory,
cost of goods sold
***
Based on the job order cost accounting plan, Eva wants to present an alternative
approach for Gold Leaf Trophies. She is now interested in determining how
much it costs to produce each order received by the company for customized
manufactured trophies. Eva can easily trace the direct materials and the direct
