WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
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5 Steps in ABC - ANSWER-1. Identify overhead cost activities in each process (Unit, Batch, Product Line,
& Facility Support) for an example electricity,
2. Analyze individual overhead costs in terms of cost activities (cost pools: how much OC is created by
Unit, Batch, Product Line, & Facility = the end results,
3. Identify measurable cost drivers (we need cost drivers which is a numerical measure that reflects the
amount of an overhead cost caused by a particular activity). Each overhead cost activities need a cost
driver.
4. Assign overhead (
5. Use the ABC data to make decisions (
A company has projected the following sales for the spring quarter of 2014: April $200,000 May
$250,000 June $275,000 65% of all sales are paid for with cash. The remainder is on credit. The pattern
for credit receivables collections are: Month of Sale 60% Month After Sale 30% Second Month After Sale
10%
What are the forecasted cash collections for the month of June? - ANSWER-$269,750
A company is experiencing an increase in their bad debt expense.
Which change in credit policy would cause this increase? - ANSWER-Credit limits were increased for all
customers.
A company manufactures and sells widgets. The following information is available:
• Each widget sells for $100. • The variable cost per widget is $50. • Total fixed costs per month are
$300,000.
WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
,WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
How many widgets does the company need to sell each month to break even? - ANSWER-6,000
A company manufactures custom-built wooden bookshelves.
Which two costs would the company classify as period costs? - ANSWER-Salary cost of the receptionist
Advertising cost
A company's asset mix is determined by - ANSWER-Dividing each asset item on the balance sheet by
total assets
A company's asset mix is strongly influence by - ANSWER-The company's industry
A corporation has total liabilities of $300 million, total owners' equity of $100 million, and current assets
of $50 million.
What is the value of the firm's long-term assets? - ANSWER-$350 million
A CVP graph is constructed as follows: - ANSWER-Draw the two axes with dollars on the vertical axis and
units on the horizontal axis.
Draw the fixed cost line, which is a horizontal line indicating the total amount of fixed cost.
Draw the total cost line. This line starts on the vertical axis at the amount of fixed cost, and the upward
slope of the line is equal to the variable cost per unit.
WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
,WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
Draw the total revenue line. This line starts at the origin ($0, 0 units), and the upward slope of the line is
equal to the selling price per unit.
Label the break-even point. This is the point where the total revenue and total cost lines intersect.
A measure of a company's performance that includes all items that are expected to continue into the
future is - - ANSWER-Income from Continuing Operations
A more accurate allocation of manufacturing overhead and product costing can take place when costs
are assigned on the basis of: - ANSWER-Cost drivers
A profit graph is constructed as follows: - ANSWER-Draw the two axes with dollars on the vertical axis
and units on the horizontal axis.
Place a point on the vertical axis equal to the loss the company will experience if it has no sales. This loss
is equal to the amount of fixed cost.
Place a second point, this time on the horizontal axis, indicating the number of units the company needs
to sell to break even.
Draw a line passing through these two points. This is the profit line.
A wholesale bakery would normally recognize revenue when - ANSWER-goods are delivered to the
customer.
Accounting - ANSWER-A system of providing "quantitative information, primarily financial in nature,
about economic entities that is intended to be useful in making economic decisions."
WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
, WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
Accounting Equation - ANSWER-Assets = Liabilities + Owners' Equity
Accounting information helps management to: - ANSWER-Decide what prices to charge, how to control
operations, and how to market products.
Accounting-Related Ethics - ANSWER-Personal Certification
The CEO and CFO personally certify the financial statements and disclosures.
Code of ethics
The company must have a code of ethics.
Internal control report
Management must report on the adequacy of the company's internal controls.
Sarbanes-Oxley forces companies to act more ethically.
Accounts Receivable - ANSWER-Selling accounts receivable (AR contract) is known as factoring.
Accrued Liabilities (built up gradually overtime) - ANSWER-Example; wages payable (at the end of each
day of work, money owed), taxes payable, interest payable, utilities.
Accumulated Other Comprehensive Income - ANSWER-The source of these increased assets
WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
5 Steps in ABC - ANSWER-1. Identify overhead cost activities in each process (Unit, Batch, Product Line,
& Facility Support) for an example electricity,
2. Analyze individual overhead costs in terms of cost activities (cost pools: how much OC is created by
Unit, Batch, Product Line, & Facility = the end results,
3. Identify measurable cost drivers (we need cost drivers which is a numerical measure that reflects the
amount of an overhead cost caused by a particular activity). Each overhead cost activities need a cost
driver.
4. Assign overhead (
5. Use the ABC data to make decisions (
A company has projected the following sales for the spring quarter of 2014: April $200,000 May
$250,000 June $275,000 65% of all sales are paid for with cash. The remainder is on credit. The pattern
for credit receivables collections are: Month of Sale 60% Month After Sale 30% Second Month After Sale
10%
What are the forecasted cash collections for the month of June? - ANSWER-$269,750
A company is experiencing an increase in their bad debt expense.
Which change in credit policy would cause this increase? - ANSWER-Credit limits were increased for all
customers.
A company manufactures and sells widgets. The following information is available:
• Each widget sells for $100. • The variable cost per widget is $50. • Total fixed costs per month are
$300,000.
WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
,WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
How many widgets does the company need to sell each month to break even? - ANSWER-6,000
A company manufactures custom-built wooden bookshelves.
Which two costs would the company classify as period costs? - ANSWER-Salary cost of the receptionist
Advertising cost
A company's asset mix is determined by - ANSWER-Dividing each asset item on the balance sheet by
total assets
A company's asset mix is strongly influence by - ANSWER-The company's industry
A corporation has total liabilities of $300 million, total owners' equity of $100 million, and current assets
of $50 million.
What is the value of the firm's long-term assets? - ANSWER-$350 million
A CVP graph is constructed as follows: - ANSWER-Draw the two axes with dollars on the vertical axis and
units on the horizontal axis.
Draw the fixed cost line, which is a horizontal line indicating the total amount of fixed cost.
Draw the total cost line. This line starts on the vertical axis at the amount of fixed cost, and the upward
slope of the line is equal to the variable cost per unit.
WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
,WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
Draw the total revenue line. This line starts at the origin ($0, 0 units), and the upward slope of the line is
equal to the selling price per unit.
Label the break-even point. This is the point where the total revenue and total cost lines intersect.
A measure of a company's performance that includes all items that are expected to continue into the
future is - - ANSWER-Income from Continuing Operations
A more accurate allocation of manufacturing overhead and product costing can take place when costs
are assigned on the basis of: - ANSWER-Cost drivers
A profit graph is constructed as follows: - ANSWER-Draw the two axes with dollars on the vertical axis
and units on the horizontal axis.
Place a point on the vertical axis equal to the loss the company will experience if it has no sales. This loss
is equal to the amount of fixed cost.
Place a second point, this time on the horizontal axis, indicating the number of units the company needs
to sell to break even.
Draw a line passing through these two points. This is the profit line.
A wholesale bakery would normally recognize revenue when - ANSWER-goods are delivered to the
customer.
Accounting - ANSWER-A system of providing "quantitative information, primarily financial in nature,
about economic entities that is intended to be useful in making economic decisions."
WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
, WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
Accounting Equation - ANSWER-Assets = Liabilities + Owners' Equity
Accounting information helps management to: - ANSWER-Decide what prices to charge, how to control
operations, and how to market products.
Accounting-Related Ethics - ANSWER-Personal Certification
The CEO and CFO personally certify the financial statements and disclosures.
Code of ethics
The company must have a code of ethics.
Internal control report
Management must report on the adequacy of the company's internal controls.
Sarbanes-Oxley forces companies to act more ethically.
Accounts Receivable - ANSWER-Selling accounts receivable (AR contract) is known as factoring.
Accrued Liabilities (built up gradually overtime) - ANSWER-Example; wages payable (at the end of each
day of work, money owed), taxes payable, interest payable, utilities.
Accumulated Other Comprehensive Income - ANSWER-The source of these increased assets
WGU C213 ACCOUNTING FOR DECISION MAKERS
OBJECTIVE ASSESSMENT EXAM Questions with
Verified Answers () Grade A+ Guarantee
