PRINCIPLES OF FINANCIAL AND
MANAGERIAL ACCOUNTING - D196
WGU EXAM QUESTIONS AND
ANSWERS. VERIFIED 2025/2026.
The production budget - ANS Sales budget + ending finished goods inventory - beginning
finished goods inventory
direct materials production budget - ANS Production budget × direct materials per unit
the direct materials purchases budget - ANS Direct materials production budget + ending
direct materials inventory - beginning direct materials inventory
Cash collected from customers - ANS (current period revenue × current period collection
rate) + cash collected from previous period sales
Cash payments to suppliers - ANS (current period purchases × current period payment rate) +
cash paid on previous period purchases
Cost Variance - ANS Difference between actual costs and budgeted costs
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Contribution Margin - ANS = 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 - ANS = Sales Revenue - Variable Costs - Fixed Costs
A profit level desired by management.
At break-even - ANS Target income = 0
Sales Revenue - ANS = Sales Price x Number of Units
Variable Costs - ANS = 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 - ANS Variable Costs
Unit-level activities - ANS Activities that take place each time a unit of product is produced.
Batch-level activities - ANS Activities that take place in order to support a batch or production
run, regardless of the size of the batch.
Product-line Activities - ANS Activities that take place in order to support a product line,
regardless of the number of batches or individual units produced.
cost pool - ANS Total cost being generated by a specific overhead cost activity.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, cost driver - ANS A numerical measure used to reflect the amount of a specific cost that is
associated with a particular activity
Activity rate - ANS The amount of the estimated cost pool divided by the estimated number
of cost driver events
How do expenses impact the accounting equation? - ANS Expenses decrease owners' equity
Purpose of the accounting cycle? - ANS To turn information about transactions into financial
statements
How is gross profit computed? - ANS Sales minus cost of good sold
Which type of account is retained earnings? - ANS Equity
How does a classified balance sheet provide useful info to a decision maker? - ANS It
distinguishes between current and long-term assets
What are the three primary functions that company managers use managerial accounting info
for? - ANS Planning, controlling, evaluating
How could a period cost be reported in an income statement? - ANS As an admin expense
How are the wages of the cashiers classified in a merchandising company? - ANS Selling
expense
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
MANAGERIAL ACCOUNTING - D196
WGU EXAM QUESTIONS AND
ANSWERS. VERIFIED 2025/2026.
The production budget - ANS Sales budget + ending finished goods inventory - beginning
finished goods inventory
direct materials production budget - ANS Production budget × direct materials per unit
the direct materials purchases budget - ANS Direct materials production budget + ending
direct materials inventory - beginning direct materials inventory
Cash collected from customers - ANS (current period revenue × current period collection
rate) + cash collected from previous period sales
Cash payments to suppliers - ANS (current period purchases × current period payment rate) +
cash paid on previous period purchases
Cost Variance - ANS Difference between actual costs and budgeted costs
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Contribution Margin - ANS = 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 - ANS = Sales Revenue - Variable Costs - Fixed Costs
A profit level desired by management.
At break-even - ANS Target income = 0
Sales Revenue - ANS = Sales Price x Number of Units
Variable Costs - ANS = 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 - ANS Variable Costs
Unit-level activities - ANS Activities that take place each time a unit of product is produced.
Batch-level activities - ANS Activities that take place in order to support a batch or production
run, regardless of the size of the batch.
Product-line Activities - ANS Activities that take place in order to support a product line,
regardless of the number of batches or individual units produced.
cost pool - ANS Total cost being generated by a specific overhead cost activity.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, cost driver - ANS A numerical measure used to reflect the amount of a specific cost that is
associated with a particular activity
Activity rate - ANS The amount of the estimated cost pool divided by the estimated number
of cost driver events
How do expenses impact the accounting equation? - ANS Expenses decrease owners' equity
Purpose of the accounting cycle? - ANS To turn information about transactions into financial
statements
How is gross profit computed? - ANS Sales minus cost of good sold
Which type of account is retained earnings? - ANS Equity
How does a classified balance sheet provide useful info to a decision maker? - ANS It
distinguishes between current and long-term assets
What are the three primary functions that company managers use managerial accounting info
for? - ANS Planning, controlling, evaluating
How could a period cost be reported in an income statement? - ANS As an admin expense
How are the wages of the cashiers classified in a merchandising company? - ANS Selling
expense
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
