WGU Managerial Accounting UFC1 (Questions With In-
Depth Solutions)
Cost accounting Right Ans - An area of accounting that involves measuring,
recording, and reporting product costs.
Value added activity Right Ans - An activity that increases the perceived
value of a product or service to a customer.
Unit level activities Right Ans - Activities performed for each unit of
production.
Product level activities Right Ans - Activities performed in support of an
entire product line but not always performed every time a new unit or batch
of products is produced.
Non value added activity Right Ans - An activity that, if eliminated, would
not reduce the perceived value of a company's product or service.
Facility level activities Right Ans - Activities required to support or sustain
an entire production process.
Cost driver Right Ans - Any factor or activity that has a direct cause-effect
relationship with the resources consumed. In ABC, these are used to assign
activity cost pools to products or services.
Batch level activities Right Ans - Activities performed for each batch of
products rather than for each unit.
Activity cost pool Right Ans - The overhead cost attributed to a distinct
type of activity or related activities.
Activity based management ABM Right Ans - Extends ABC from product
costing to a comprehensive management tool that focuses on reducing costs
and improving processes and decision-making.
Activity Right Ans - Any event, action, transaction, or work sequence that
incurs costs when producing a product or performing a service.
, Variable costs Right Ans - Costs that vary in total directly and
proportionately with changes in the activity level.
Sales mix Right Ans - The relative percentage in which a company sells its
multiple products.
Operating leverage Right Ans - The extent to which a company's net
income reacts to a change in sales. It is determined by a company's relative
use of fixed versus variable costs.
Degree of operating leverage Right Ans - A measure of the extent to which
a company's net income reacts to a change in sales. It is calculated by dividing
contribution margin by net income.
Cost structure Right Ans - The relative proportion of fixed versus variable
costs that a company incurs.
Unit contribution margin Right Ans - The amount of revenue remaining per
unit after deducting variable costs; calculated as unit selling price minus unit
variable costs.
Target net income Right Ans - The income objective set by management.
Relevant range Right Ans - The range of the activity index over which the
company expects to operate during the year.
Mixed costs Right Ans - Costs that contain both a variable- and a fixed-cost
element and change in total but not proportionately with changes in the
activity level.
Margin of safety Right Ans - The difference between actual or expected
sales and sales at the break-even point.
High low method Right Ans - A mathematical method that uses the total
costs incurred at the high and low levels of activity to classify mixed costs into
fixed and variable components.
Depth Solutions)
Cost accounting Right Ans - An area of accounting that involves measuring,
recording, and reporting product costs.
Value added activity Right Ans - An activity that increases the perceived
value of a product or service to a customer.
Unit level activities Right Ans - Activities performed for each unit of
production.
Product level activities Right Ans - Activities performed in support of an
entire product line but not always performed every time a new unit or batch
of products is produced.
Non value added activity Right Ans - An activity that, if eliminated, would
not reduce the perceived value of a company's product or service.
Facility level activities Right Ans - Activities required to support or sustain
an entire production process.
Cost driver Right Ans - Any factor or activity that has a direct cause-effect
relationship with the resources consumed. In ABC, these are used to assign
activity cost pools to products or services.
Batch level activities Right Ans - Activities performed for each batch of
products rather than for each unit.
Activity cost pool Right Ans - The overhead cost attributed to a distinct
type of activity or related activities.
Activity based management ABM Right Ans - Extends ABC from product
costing to a comprehensive management tool that focuses on reducing costs
and improving processes and decision-making.
Activity Right Ans - Any event, action, transaction, or work sequence that
incurs costs when producing a product or performing a service.
, Variable costs Right Ans - Costs that vary in total directly and
proportionately with changes in the activity level.
Sales mix Right Ans - The relative percentage in which a company sells its
multiple products.
Operating leverage Right Ans - The extent to which a company's net
income reacts to a change in sales. It is determined by a company's relative
use of fixed versus variable costs.
Degree of operating leverage Right Ans - A measure of the extent to which
a company's net income reacts to a change in sales. It is calculated by dividing
contribution margin by net income.
Cost structure Right Ans - The relative proportion of fixed versus variable
costs that a company incurs.
Unit contribution margin Right Ans - The amount of revenue remaining per
unit after deducting variable costs; calculated as unit selling price minus unit
variable costs.
Target net income Right Ans - The income objective set by management.
Relevant range Right Ans - The range of the activity index over which the
company expects to operate during the year.
Mixed costs Right Ans - Costs that contain both a variable- and a fixed-cost
element and change in total but not proportionately with changes in the
activity level.
Margin of safety Right Ans - The difference between actual or expected
sales and sales at the break-even point.
High low method Right Ans - A mathematical method that uses the total
costs incurred at the high and low levels of activity to classify mixed costs into
fixed and variable components.
