WGU D101 Cost and Managerial Accounting questions
with verified answers
A company has a warehouse supervisor whose annual costs to the company are
$40,000. The warehouse is used to receive and store packaged goods in boxes.
Once a customer's order is received, the boxes are removed and shipped. The
company is trying to determine what the best way is to allocate the warehouse
supervisor's annual costs to each customer order that is shipped during the year.
What is the appropriate cost driver to allocate the warehouse supervisor's annual
costs to each customer order?
a. The number of boxes received in the warehouse throughout the year
b. The number of boxes in the warehouse at the beginning of the year
c. The number of boxes shipped to customers throughout the year
d. The number of boxes in the warehouse at the end of the year Ans✓✓✓ c.
Correct! The number of boxes shipped to customers throughout the year is the
appropriate cost driver in this situation as the company's objective is to
determine the best way to allocate the warehouse person's annual costs to each
customer order shipped during the year.
A company has accrued but has not paid direct labor wages in cash. What is part
of the journal entry to record the amount of direct labor wages earned?
a. Debit finished goods inventory
b. Debit work-in-process inventory
c. Debit manufacturing overhead
d. Credit work-in-process inventory Ans✓✓✓ b.
,A company is using process costing, which cost step should be followed?
a. Calculate the manufacturing overhead costs for each product
b. Calculate the direct labor costs for each product
c. Calculate the direct materials costs for each product
d. Calculate the average cost using total manufacturing costs for each product
Ans✓✓✓ d.
An overapplication of manufacturing overhead would be corrected by which
entry?
a. Debiting cost of goods sold and crediting manufacturing overhead
b. Debiting manufacturing overhead and crediting cost of goods sold
c. Debiting work-in-process inventory and crediting manufacturing overhead
d. Debiting finished goods inventory and crediting manufacturing overhead
Ans✓✓✓ b.
Applied manufacturing overhead is directly recorded as a credit to which
account?
a. Cost of goods sold
b. Work-in-process inventory
c. Manufacturing overhead
d. Finished goods inventory Ans✓✓✓ c.
,Assume a production process using process costing starts with a certain number
of units in beginning inventory that are partially completed, a certain number of
units are started and completed during the period, and the ending inventory at
the end of the period is partially complete.
How would you determine the equivalent units of production in this situation for
the period?
a. You would add the work required to complete the units in beginning inventory
plus the degree of completion of the ending inventory units.
b. You would add the work required to start and complete the units started
during the period plus the degree of completion of the ending inventory units.
c. You would add the work required to complete the units in beginning inventory
to the number of units started and completed during the period to the degree of
completion of the ending inventory units.
d. You would add the work required to complete the Ans✓✓✓ c. Correct! To
determine the equivalent units of production in this situation in this period, you
would add the work required to complete the units in beginning inventory plus
the number of units started and completed during the period plus the degree of
completion of the ending inventory units.
At the end of an accounting period, the manufacturing overhead account has
debits totaling $25,000 and credits totaling $28,000. In this case, which statement
is true?
a. Actual manufacturing costs were $28,000.
b. Manufacturing overhead is underapplied by $3,000.
, c. Manufacturing overhead is overapplied by $3,000.
d. Applied manufacturing overhead costs were $25,000. Ans✓✓✓ c.
Filler Rox Company is concerned about current tariffs being put in place by
different countries where it operates. Filler Rox's management wants to know
how the company could handle an inability to get the raw materials it needs to
make products.
When considering how a shock like this could affect Filler Rox's profitability, which
of the following tools would be most helpful?
a. Margin of safety
b. Gross margin
c. Degree of operating leverage
d. Operating leverage Ans✓✓✓ a. Correct! Margin of safety is a measure of how
close a company currently is to breakeven, and, therefore, is a measure of how
well it could handle a decrease in sales before it starts to lose money.
How are actual manufacturing overhead costs incurred throughout the year
journalized?
a. As debits to the work-in-process account
b. As debits into the manufacturing overhead account
c. As credits into the manufacturing overhead account
d. As credits to the work-in-process account Ans✓✓✓ b.
with verified answers
A company has a warehouse supervisor whose annual costs to the company are
$40,000. The warehouse is used to receive and store packaged goods in boxes.
Once a customer's order is received, the boxes are removed and shipped. The
company is trying to determine what the best way is to allocate the warehouse
supervisor's annual costs to each customer order that is shipped during the year.
What is the appropriate cost driver to allocate the warehouse supervisor's annual
costs to each customer order?
a. The number of boxes received in the warehouse throughout the year
b. The number of boxes in the warehouse at the beginning of the year
c. The number of boxes shipped to customers throughout the year
d. The number of boxes in the warehouse at the end of the year Ans✓✓✓ c.
Correct! The number of boxes shipped to customers throughout the year is the
appropriate cost driver in this situation as the company's objective is to
determine the best way to allocate the warehouse person's annual costs to each
customer order shipped during the year.
A company has accrued but has not paid direct labor wages in cash. What is part
of the journal entry to record the amount of direct labor wages earned?
a. Debit finished goods inventory
b. Debit work-in-process inventory
c. Debit manufacturing overhead
d. Credit work-in-process inventory Ans✓✓✓ b.
,A company is using process costing, which cost step should be followed?
a. Calculate the manufacturing overhead costs for each product
b. Calculate the direct labor costs for each product
c. Calculate the direct materials costs for each product
d. Calculate the average cost using total manufacturing costs for each product
Ans✓✓✓ d.
An overapplication of manufacturing overhead would be corrected by which
entry?
a. Debiting cost of goods sold and crediting manufacturing overhead
b. Debiting manufacturing overhead and crediting cost of goods sold
c. Debiting work-in-process inventory and crediting manufacturing overhead
d. Debiting finished goods inventory and crediting manufacturing overhead
Ans✓✓✓ b.
Applied manufacturing overhead is directly recorded as a credit to which
account?
a. Cost of goods sold
b. Work-in-process inventory
c. Manufacturing overhead
d. Finished goods inventory Ans✓✓✓ c.
,Assume a production process using process costing starts with a certain number
of units in beginning inventory that are partially completed, a certain number of
units are started and completed during the period, and the ending inventory at
the end of the period is partially complete.
How would you determine the equivalent units of production in this situation for
the period?
a. You would add the work required to complete the units in beginning inventory
plus the degree of completion of the ending inventory units.
b. You would add the work required to start and complete the units started
during the period plus the degree of completion of the ending inventory units.
c. You would add the work required to complete the units in beginning inventory
to the number of units started and completed during the period to the degree of
completion of the ending inventory units.
d. You would add the work required to complete the Ans✓✓✓ c. Correct! To
determine the equivalent units of production in this situation in this period, you
would add the work required to complete the units in beginning inventory plus
the number of units started and completed during the period plus the degree of
completion of the ending inventory units.
At the end of an accounting period, the manufacturing overhead account has
debits totaling $25,000 and credits totaling $28,000. In this case, which statement
is true?
a. Actual manufacturing costs were $28,000.
b. Manufacturing overhead is underapplied by $3,000.
, c. Manufacturing overhead is overapplied by $3,000.
d. Applied manufacturing overhead costs were $25,000. Ans✓✓✓ c.
Filler Rox Company is concerned about current tariffs being put in place by
different countries where it operates. Filler Rox's management wants to know
how the company could handle an inability to get the raw materials it needs to
make products.
When considering how a shock like this could affect Filler Rox's profitability, which
of the following tools would be most helpful?
a. Margin of safety
b. Gross margin
c. Degree of operating leverage
d. Operating leverage Ans✓✓✓ a. Correct! Margin of safety is a measure of how
close a company currently is to breakeven, and, therefore, is a measure of how
well it could handle a decrease in sales before it starts to lose money.
How are actual manufacturing overhead costs incurred throughout the year
journalized?
a. As debits to the work-in-process account
b. As debits into the manufacturing overhead account
c. As credits into the manufacturing overhead account
d. As credits to the work-in-process account Ans✓✓✓ b.
