WGU C253 Advanced Managerial
Accounting Exam with Questions and
Correct Answers 2025
Absorption ,costing ,- ,CORRECT ,ANSWER-A ,costing ,method ,that ,includes ,all
,manufacturing ,costs—direct ,materials, ,direct ,labor, ,and ,both ,variable ,and ,fixed
,manufacturing ,overhead—in ,unit ,product ,costs.
Activity ,- ,CORRECT ,ANSWER-An ,event ,that ,causes ,the ,consumption ,of ,overhead
,resources ,in ,an ,organization.
Activity ,base ,- ,CORRECT ,ANSWER-A ,measure ,of ,whatever ,causes ,the ,incurrence ,of
,a ,variable ,cost. ,For ,example, ,the ,total ,cost ,of ,surgical ,gloves ,in ,a ,hospital ,will
,increase ,as ,the ,number ,of ,surgeries ,increases. ,Therefore, ,the ,number ,of ,surgeries ,is
,the ,activity ,base ,that ,explains ,the ,total ,cost ,of ,surgical ,gloves.
Activity ,cost ,pool ,- ,CORRECT ,ANSWER-A ,"bucket" ,in ,which ,costs ,are ,accumulated
,that ,relate ,to ,a ,single ,activity ,measure ,in ,an ,activity-based ,costing ,system.
Activity ,measure ,- ,CORRECT ,ANSWER-An ,allocation ,base ,in ,an ,activity-based
,costing ,system; ,ideally, ,a ,measure ,of ,the ,amount ,of ,activity ,that ,drives ,the ,costs ,in
,an ,activity ,cost ,pool.
Activity ,variance ,- ,CORRECT ,ANSWER-The ,difference ,between ,a ,revenue ,or ,cost
,item ,in ,the ,flexible ,budget ,and ,the ,same ,item ,in ,the ,static ,planning ,budget. ,An
,activity ,variance ,is ,due ,solely ,to ,the ,difference ,between ,the ,actual ,level ,of ,activity
,used ,in ,the ,flexible ,budget ,and ,the ,level ,of ,activity ,assumed ,in ,the ,planning ,budget.
Activity-based ,costing ,(ABC) ,- ,CORRECT ,ANSWER-A ,costing ,method ,based ,on
,activities ,that ,is ,designed ,to ,provide ,managers ,with ,cost ,information ,for ,strategic ,and
,other ,decisions ,that ,potentially ,affect ,capacity ,and ,therefore ,fixed ,as ,well ,as ,variable
,costs.
Activity-based ,management ,(ABM) ,- ,CORRECT ,ANSWER-A ,management ,approach
,that ,focuses ,on ,managing ,activities ,as ,a ,way ,of ,eliminating ,waste ,and ,reducing
,delays ,and ,defects.
Administrative ,costs ,- ,CORRECT ,ANSWER-All ,executive, ,organizational, ,and ,clerical
,costs ,associated ,with ,the ,general ,management ,of ,an ,organization ,rather ,than ,with
,manufacturing ,or ,selling.
, Allocation ,base ,- ,CORRECT ,ANSWER-A ,measure ,of ,activity ,such ,as ,direct ,labor-
hours ,or ,machine-hours ,that ,is ,used ,to ,assign ,costs ,to ,cost ,objects.
Avoidable ,cost ,- ,CORRECT ,ANSWER-A ,cost ,that ,can ,be ,eliminated ,by ,choosing ,one
,alternative ,over ,another ,in ,a ,decision. ,This ,term ,is ,synonymous ,with ,differential ,cost
,and ,relevant ,cost.
Batch-level ,activities ,- ,CORRECT ,ANSWER-Activities ,that ,are ,performed ,each ,time ,a
,batch ,of ,goods ,is ,handled ,or ,processed, ,regardless ,of ,how ,many ,units ,are ,in ,the
,batch. ,The ,amount ,of ,resource ,consumed ,depends ,on ,the ,number ,of ,batches ,run
,rather ,than ,on ,the ,number ,of ,units ,in ,the ,batch.
Benchmarking ,- ,CORRECT ,ANSWER-A ,systematic ,approach ,to ,identifying ,the
,activities ,with ,the ,greatest ,potential ,for ,improvement.
Bill ,of ,materials ,- ,CORRECT ,ANSWER-A ,document ,that ,shows ,the ,quantity ,of ,each
,type ,of ,direct ,material ,required ,to ,make ,a ,product.
Bottleneck ,- ,CORRECT ,ANSWER-A ,machine ,or ,some ,other ,part ,of ,a ,process ,that
,limits ,the ,total ,output ,of ,the ,entire ,system.
Break-even ,point ,- ,CORRECT ,ANSWER-The ,level ,of ,sales ,at ,which ,profit ,is ,zero.
Budget ,- ,CORRECT ,ANSWER-A ,detailed ,plan ,for ,the ,future ,that ,is ,usually ,expressed
,in ,formal ,quantitative ,terms.
Capital ,budgeting ,- ,CORRECT ,ANSWER-The ,process ,of ,planning ,significant
,investments ,in ,projects ,that ,have ,long-term ,implications ,such ,as ,the ,purchase ,of ,new
,equipment ,or ,the ,introduction ,of ,a ,new ,product.
Cash ,budget ,- ,CORRECT ,ANSWER-A ,detailed ,plan ,showing ,how ,cash ,resources ,will
,be ,acquired ,and ,used ,over ,a ,specific ,time ,period.
Committed ,fixed ,costs ,- ,CORRECT ,ANSWER-Investments ,in ,facilities, ,equipment,
,and ,basic ,organizational ,structure ,that ,can't ,be ,significantly ,reduced ,even ,for ,short
,periods ,of ,time ,without ,making ,fundamental ,changes.
Common ,cost ,- ,CORRECT ,ANSWER-A ,cost ,that ,is ,incurred ,to ,support ,a ,number ,of
,cost ,objects ,but ,that ,cannot ,be ,traced ,to ,them ,individually. ,For ,example, ,the ,wage
,cost ,of ,the ,pilot ,of ,a ,747 ,airliner ,is ,a ,common ,cost ,of ,all ,of ,the ,passengers ,on ,the
,aircraft. ,Without ,the ,pilot, ,there ,would ,be ,no ,flight ,and ,no ,passengers. ,But ,no ,part ,of
,the ,pilot's ,wage ,is ,caused ,by ,any ,one ,passenger ,taking ,the ,flight.
Accounting Exam with Questions and
Correct Answers 2025
Absorption ,costing ,- ,CORRECT ,ANSWER-A ,costing ,method ,that ,includes ,all
,manufacturing ,costs—direct ,materials, ,direct ,labor, ,and ,both ,variable ,and ,fixed
,manufacturing ,overhead—in ,unit ,product ,costs.
Activity ,- ,CORRECT ,ANSWER-An ,event ,that ,causes ,the ,consumption ,of ,overhead
,resources ,in ,an ,organization.
Activity ,base ,- ,CORRECT ,ANSWER-A ,measure ,of ,whatever ,causes ,the ,incurrence ,of
,a ,variable ,cost. ,For ,example, ,the ,total ,cost ,of ,surgical ,gloves ,in ,a ,hospital ,will
,increase ,as ,the ,number ,of ,surgeries ,increases. ,Therefore, ,the ,number ,of ,surgeries ,is
,the ,activity ,base ,that ,explains ,the ,total ,cost ,of ,surgical ,gloves.
Activity ,cost ,pool ,- ,CORRECT ,ANSWER-A ,"bucket" ,in ,which ,costs ,are ,accumulated
,that ,relate ,to ,a ,single ,activity ,measure ,in ,an ,activity-based ,costing ,system.
Activity ,measure ,- ,CORRECT ,ANSWER-An ,allocation ,base ,in ,an ,activity-based
,costing ,system; ,ideally, ,a ,measure ,of ,the ,amount ,of ,activity ,that ,drives ,the ,costs ,in
,an ,activity ,cost ,pool.
Activity ,variance ,- ,CORRECT ,ANSWER-The ,difference ,between ,a ,revenue ,or ,cost
,item ,in ,the ,flexible ,budget ,and ,the ,same ,item ,in ,the ,static ,planning ,budget. ,An
,activity ,variance ,is ,due ,solely ,to ,the ,difference ,between ,the ,actual ,level ,of ,activity
,used ,in ,the ,flexible ,budget ,and ,the ,level ,of ,activity ,assumed ,in ,the ,planning ,budget.
Activity-based ,costing ,(ABC) ,- ,CORRECT ,ANSWER-A ,costing ,method ,based ,on
,activities ,that ,is ,designed ,to ,provide ,managers ,with ,cost ,information ,for ,strategic ,and
,other ,decisions ,that ,potentially ,affect ,capacity ,and ,therefore ,fixed ,as ,well ,as ,variable
,costs.
Activity-based ,management ,(ABM) ,- ,CORRECT ,ANSWER-A ,management ,approach
,that ,focuses ,on ,managing ,activities ,as ,a ,way ,of ,eliminating ,waste ,and ,reducing
,delays ,and ,defects.
Administrative ,costs ,- ,CORRECT ,ANSWER-All ,executive, ,organizational, ,and ,clerical
,costs ,associated ,with ,the ,general ,management ,of ,an ,organization ,rather ,than ,with
,manufacturing ,or ,selling.
, Allocation ,base ,- ,CORRECT ,ANSWER-A ,measure ,of ,activity ,such ,as ,direct ,labor-
hours ,or ,machine-hours ,that ,is ,used ,to ,assign ,costs ,to ,cost ,objects.
Avoidable ,cost ,- ,CORRECT ,ANSWER-A ,cost ,that ,can ,be ,eliminated ,by ,choosing ,one
,alternative ,over ,another ,in ,a ,decision. ,This ,term ,is ,synonymous ,with ,differential ,cost
,and ,relevant ,cost.
Batch-level ,activities ,- ,CORRECT ,ANSWER-Activities ,that ,are ,performed ,each ,time ,a
,batch ,of ,goods ,is ,handled ,or ,processed, ,regardless ,of ,how ,many ,units ,are ,in ,the
,batch. ,The ,amount ,of ,resource ,consumed ,depends ,on ,the ,number ,of ,batches ,run
,rather ,than ,on ,the ,number ,of ,units ,in ,the ,batch.
Benchmarking ,- ,CORRECT ,ANSWER-A ,systematic ,approach ,to ,identifying ,the
,activities ,with ,the ,greatest ,potential ,for ,improvement.
Bill ,of ,materials ,- ,CORRECT ,ANSWER-A ,document ,that ,shows ,the ,quantity ,of ,each
,type ,of ,direct ,material ,required ,to ,make ,a ,product.
Bottleneck ,- ,CORRECT ,ANSWER-A ,machine ,or ,some ,other ,part ,of ,a ,process ,that
,limits ,the ,total ,output ,of ,the ,entire ,system.
Break-even ,point ,- ,CORRECT ,ANSWER-The ,level ,of ,sales ,at ,which ,profit ,is ,zero.
Budget ,- ,CORRECT ,ANSWER-A ,detailed ,plan ,for ,the ,future ,that ,is ,usually ,expressed
,in ,formal ,quantitative ,terms.
Capital ,budgeting ,- ,CORRECT ,ANSWER-The ,process ,of ,planning ,significant
,investments ,in ,projects ,that ,have ,long-term ,implications ,such ,as ,the ,purchase ,of ,new
,equipment ,or ,the ,introduction ,of ,a ,new ,product.
Cash ,budget ,- ,CORRECT ,ANSWER-A ,detailed ,plan ,showing ,how ,cash ,resources ,will
,be ,acquired ,and ,used ,over ,a ,specific ,time ,period.
Committed ,fixed ,costs ,- ,CORRECT ,ANSWER-Investments ,in ,facilities, ,equipment,
,and ,basic ,organizational ,structure ,that ,can't ,be ,significantly ,reduced ,even ,for ,short
,periods ,of ,time ,without ,making ,fundamental ,changes.
Common ,cost ,- ,CORRECT ,ANSWER-A ,cost ,that ,is ,incurred ,to ,support ,a ,number ,of
,cost ,objects ,but ,that ,cannot ,be ,traced ,to ,them ,individually. ,For ,example, ,the ,wage
,cost ,of ,the ,pilot ,of ,a ,747 ,airliner ,is ,a ,common ,cost ,of ,all ,of ,the ,passengers ,on ,the
,aircraft. ,Without ,the ,pilot, ,there ,would ,be ,no ,flight ,and ,no ,passengers. ,But ,no ,part ,of
,the ,pilot's ,wage ,is ,caused ,by ,any ,one ,passenger ,taking ,the ,flight.
