Principles of Financial and Managerial
Accounting - D196 WGU UPDATED
ACTUAL Exam Questions and CORRECT
Answers
the production budget - CORRECT ANSWER - Sales budget + ending finished goods
inventory - beginning finished goods inventory
direct materials production budget - CORRECT ANSWER - Production budget × direct
materials per unit
the direct materials purchases budget - CORRECT ANSWER - Direct materials production
budget + ending direct materials inventory - beginning direct materials inventory
Cash collected from customers - CORRECT ANSWER - (current period revenue × current
period collection rate) + cash collected from previous period sales
Cash payments to suppliers - CORRECT ANSWER - (current period purchases × current
period payment rate) + cash paid on previous period purchases
Cost Variance - CORRECT ANSWER - Difference between actual costs and budgeted
costs
Contribution Margin - CORRECT ANSWER - = Sales Revenue - Variable Costs
The difference between total sales and variable costs; the portion of sales revenue available to
cover fixed costs and provide a profit.
Target Income - CORRECT ANSWER - = Sales Revenue - Variable Costs - Fixed Costs
A profit level desired by management.
,At break-even - CORRECT ANSWER - Target income = 0
Sales Revenue - CORRECT ANSWER - = Sales Price x Number of Units
Variable Costs - CORRECT ANSWER - = Variable Cost per Unit x Number of Units
Costs that change in total in direct proportion to changes in activity level.
Variable Cost Ratio x Sales Revenue - CORRECT ANSWER - Variable Costs
Unit-level activities - CORRECT ANSWER - Activities that take place each time a unit of
product is produced.
Batch-level activities - CORRECT ANSWER - Activities that take place in order to
support a batch or production run, regardless of the size of the batch.
Product-line Activities - CORRECT ANSWER - Activities that take place in order to
support a product line, regardless of the number of batches or individual units produced.
cost pool - CORRECT ANSWER - Total cost being generated by a specific overhead cost
activity.
cost driver - CORRECT ANSWER - A numerical measure used to reflect the amount of a
specific cost that is associated with a particular activity
Activity rate - CORRECT ANSWER - The amount of the estimated cost pool divided by
the estimated number of cost driver events
How do expenses impact the accounting equation? - CORRECT ANSWER - Expenses
decrease owners' equity
, Purpose of the accounting cycle? - CORRECT ANSWER - To turn information about
transactions into financial statements
How is gross profit computed? - CORRECT ANSWER - Sales minus cost of good sold
Which type of account is retained earnings? - CORRECT ANSWER - Equity
How does a classified balance sheet provide useful info to a decision maker? - CORRECT
ANSWER - It distinguishes between current and long-term assets
What are the three primary functions that company managers use managerial accounting info
for? - CORRECT ANSWER - Planning, controlling, evaluating
How could a period cost be reported in an income statement? - CORRECT ANSWER - As
an admin expense
How are the wages of the cashiers classified in a merchandising company? - CORRECT
ANSWER - Selling expense
What is the label given to the quantity computed as estimated level of activity - CORRECT
ANSWER - Predetermined overhead rate
In a job order costing system, what is the proper accounting for a product cost? - CORRECT
ANSWER - It is reported as a part of cost of goods sold
Which item is a period cost? - CORRECT ANSWER - Utility bills to heat the headquarters
building
Accounting - D196 WGU UPDATED
ACTUAL Exam Questions and CORRECT
Answers
the production budget - CORRECT ANSWER - Sales budget + ending finished goods
inventory - beginning finished goods inventory
direct materials production budget - CORRECT ANSWER - Production budget × direct
materials per unit
the direct materials purchases budget - CORRECT ANSWER - Direct materials production
budget + ending direct materials inventory - beginning direct materials inventory
Cash collected from customers - CORRECT ANSWER - (current period revenue × current
period collection rate) + cash collected from previous period sales
Cash payments to suppliers - CORRECT ANSWER - (current period purchases × current
period payment rate) + cash paid on previous period purchases
Cost Variance - CORRECT ANSWER - Difference between actual costs and budgeted
costs
Contribution Margin - CORRECT ANSWER - = Sales Revenue - Variable Costs
The difference between total sales and variable costs; the portion of sales revenue available to
cover fixed costs and provide a profit.
Target Income - CORRECT ANSWER - = Sales Revenue - Variable Costs - Fixed Costs
A profit level desired by management.
,At break-even - CORRECT ANSWER - Target income = 0
Sales Revenue - CORRECT ANSWER - = Sales Price x Number of Units
Variable Costs - CORRECT ANSWER - = Variable Cost per Unit x Number of Units
Costs that change in total in direct proportion to changes in activity level.
Variable Cost Ratio x Sales Revenue - CORRECT ANSWER - Variable Costs
Unit-level activities - CORRECT ANSWER - Activities that take place each time a unit of
product is produced.
Batch-level activities - CORRECT ANSWER - Activities that take place in order to
support a batch or production run, regardless of the size of the batch.
Product-line Activities - CORRECT ANSWER - Activities that take place in order to
support a product line, regardless of the number of batches or individual units produced.
cost pool - CORRECT ANSWER - Total cost being generated by a specific overhead cost
activity.
cost driver - CORRECT ANSWER - A numerical measure used to reflect the amount of a
specific cost that is associated with a particular activity
Activity rate - CORRECT ANSWER - The amount of the estimated cost pool divided by
the estimated number of cost driver events
How do expenses impact the accounting equation? - CORRECT ANSWER - Expenses
decrease owners' equity
, Purpose of the accounting cycle? - CORRECT ANSWER - To turn information about
transactions into financial statements
How is gross profit computed? - CORRECT ANSWER - Sales minus cost of good sold
Which type of account is retained earnings? - CORRECT ANSWER - Equity
How does a classified balance sheet provide useful info to a decision maker? - CORRECT
ANSWER - It distinguishes between current and long-term assets
What are the three primary functions that company managers use managerial accounting info
for? - CORRECT ANSWER - Planning, controlling, evaluating
How could a period cost be reported in an income statement? - CORRECT ANSWER - As
an admin expense
How are the wages of the cashiers classified in a merchandising company? - CORRECT
ANSWER - Selling expense
What is the label given to the quantity computed as estimated level of activity - CORRECT
ANSWER - Predetermined overhead rate
In a job order costing system, what is the proper accounting for a product cost? - CORRECT
ANSWER - It is reported as a part of cost of goods sold
Which item is a period cost? - CORRECT ANSWER - Utility bills to heat the headquarters
building
