WGU D101 Cost and Managerial
Accounting Complete Questions and
Correct Answers || Guaranteed Pass
1. The contribution margin for a company is $25 per unit, the sales price is $50
per unit, and fixed costs are $100,000. How many units must be sold to
make a target net income of $200,000?
a. 12,000 units
b. 15,000 units
c. 9,000 units
d. 6,000 units - ANSWER a. Correct! The correct formula for
calculating the target level of income is (fixed costs + target level net
income) divided by the contribution margin per unit. In this case, that
is $100,000 plus $200,000 divided by $25 per unit or 12,000 units.
2. Which statement describes activity-based costing (ABC)?
a. ABC includes only manufacturing costs in calculating product costs.
b. ABC includes only costs related to selling and distributing the
product.
c. ABC considers nonmanufacturing and manufacturing costs.
d. ABC considers only manufacturing costs in evaluating product costs. -
ANSWER c. Correct! ABC considers both nonmanufacturing and
manufacturing costs, which can be associated, both directly and
indirectly, in the manufacturing of a product.
,3. What is different about allocating overhead costs using the activity-based
costing method versus the traditional method?
a. Overhead is ignored when using the activity-based costing method.
b. Overhead is ignored when using the traditional method of overhead
allocation.
c. Overhead is allocated based on a variety of activity measures when
using activity-based costing.
d. Overhead is allocated based on a single measure of activity when
using activity-based costing. - ANSWER c. Correct! Overhead is
allocated based on a variety of activity measures when using activity-
based costing.
4. How are actual manufacturing overhead costs incurred throughout the year
journalized?
a. As debits to the work-in-process account
b. As debits into the manufacturing overhead account
c. As credits into the manufacturing overhead account
d. As credits to the work-in-process account - ANSWER b.
5. What would least likely be assigned to manufacturing overhead?
a. Repairs on factory equipment
b. Rent on the factory warehouse
c. Insurance on the factory where goods are made
d. Materials that are a key component to making manufactured goods -
ANSWER d.
,6. Applied manufacturing overhead is directly recorded as a credit to which
account?
a. Cost of goods sold
b. Work-in-process inventory
c. Manufacturing overhead
d. Finished goods inventory - ANSWER c.
7. When manufacturing overhead is underapplied, which entry is included in
closing the manufacturing overhead account?
a. A debit to cost of goods sold
b. A debit to finished goods inventory
c. A debit to work-in-process inventory
d. A debit to manufacturing overhead - ANSWER a
8. At the end of an accounting period, the manufacturing overhead account has
debits totaling $25,000 and credits totaling $28,000. In this case, which
statement is true?
a. Actual manufacturing costs were $28,000.
b. Manufacturing overhead is underapplied by $3,000.
c. Manufacturing overhead is overapplied by $3,000.
d. Applied manufacturing overhead costs were $25,000. - ANSWER c.
9. Smartistry Company uses a job order costing system and closes all
underapplied and overapplied manufacturing overhead to cost of goods sold.
The company accountant made the following entry at the end of the
accounting period: debit to cost of goods sold and credit to manufacturing
overhead. What is the purpose of this entry?
, a. To record underapplied manufacturing overhead
b. To transfer the manufacturing overhead costs to work-in-process
c. To record overapplied manufacturing overhead
d. To record actual manufacturing overhead costs for the period -
ANSWER a
10.The most common way to eliminate overapplied and underapplied
manufacturing overhead is to record the amount to cost of goods sold. What
is an alternative way to eliminate these overapplications or underapplications
of manufacturing overhead?
a. Allocate overapplied or underapplied manufacturing overhead to
finished goods inventory only
b. Allocate overapplied or underapplied manufacturing overhead to
work-in-process inventory, finished goods inventory, and cost of
goods sold on the basis of ending balances in these accounts
c. Allocate overapplied or underapplied manufacturing overhead to
work-in-process inventory only
d. Allocate overapplied or underapplied manufacturing overhead to
manufacturing overhead payable - ANSWER b.
11.An overapplication of manufacturing overhead would be corrected by which
entry?
a. Debiting cost of goods sold and crediting manufacturing overhead
b. Debiting manufacturing overhead and crediting cost of goods sold
c. Debiting work-in-process inventory and crediting manufacturing
overhead
d. Debiting finished goods inventory and crediting manufacturing
overhead - ANSWER b.
12.In which case is it appropriate to use job costing?
Accounting Complete Questions and
Correct Answers || Guaranteed Pass
1. The contribution margin for a company is $25 per unit, the sales price is $50
per unit, and fixed costs are $100,000. How many units must be sold to
make a target net income of $200,000?
a. 12,000 units
b. 15,000 units
c. 9,000 units
d. 6,000 units - ANSWER a. Correct! The correct formula for
calculating the target level of income is (fixed costs + target level net
income) divided by the contribution margin per unit. In this case, that
is $100,000 plus $200,000 divided by $25 per unit or 12,000 units.
2. Which statement describes activity-based costing (ABC)?
a. ABC includes only manufacturing costs in calculating product costs.
b. ABC includes only costs related to selling and distributing the
product.
c. ABC considers nonmanufacturing and manufacturing costs.
d. ABC considers only manufacturing costs in evaluating product costs. -
ANSWER c. Correct! ABC considers both nonmanufacturing and
manufacturing costs, which can be associated, both directly and
indirectly, in the manufacturing of a product.
,3. What is different about allocating overhead costs using the activity-based
costing method versus the traditional method?
a. Overhead is ignored when using the activity-based costing method.
b. Overhead is ignored when using the traditional method of overhead
allocation.
c. Overhead is allocated based on a variety of activity measures when
using activity-based costing.
d. Overhead is allocated based on a single measure of activity when
using activity-based costing. - ANSWER c. Correct! Overhead is
allocated based on a variety of activity measures when using activity-
based costing.
4. How are actual manufacturing overhead costs incurred throughout the year
journalized?
a. As debits to the work-in-process account
b. As debits into the manufacturing overhead account
c. As credits into the manufacturing overhead account
d. As credits to the work-in-process account - ANSWER b.
5. What would least likely be assigned to manufacturing overhead?
a. Repairs on factory equipment
b. Rent on the factory warehouse
c. Insurance on the factory where goods are made
d. Materials that are a key component to making manufactured goods -
ANSWER d.
,6. Applied manufacturing overhead is directly recorded as a credit to which
account?
a. Cost of goods sold
b. Work-in-process inventory
c. Manufacturing overhead
d. Finished goods inventory - ANSWER c.
7. When manufacturing overhead is underapplied, which entry is included in
closing the manufacturing overhead account?
a. A debit to cost of goods sold
b. A debit to finished goods inventory
c. A debit to work-in-process inventory
d. A debit to manufacturing overhead - ANSWER a
8. At the end of an accounting period, the manufacturing overhead account has
debits totaling $25,000 and credits totaling $28,000. In this case, which
statement is true?
a. Actual manufacturing costs were $28,000.
b. Manufacturing overhead is underapplied by $3,000.
c. Manufacturing overhead is overapplied by $3,000.
d. Applied manufacturing overhead costs were $25,000. - ANSWER c.
9. Smartistry Company uses a job order costing system and closes all
underapplied and overapplied manufacturing overhead to cost of goods sold.
The company accountant made the following entry at the end of the
accounting period: debit to cost of goods sold and credit to manufacturing
overhead. What is the purpose of this entry?
, a. To record underapplied manufacturing overhead
b. To transfer the manufacturing overhead costs to work-in-process
c. To record overapplied manufacturing overhead
d. To record actual manufacturing overhead costs for the period -
ANSWER a
10.The most common way to eliminate overapplied and underapplied
manufacturing overhead is to record the amount to cost of goods sold. What
is an alternative way to eliminate these overapplications or underapplications
of manufacturing overhead?
a. Allocate overapplied or underapplied manufacturing overhead to
finished goods inventory only
b. Allocate overapplied or underapplied manufacturing overhead to
work-in-process inventory, finished goods inventory, and cost of
goods sold on the basis of ending balances in these accounts
c. Allocate overapplied or underapplied manufacturing overhead to
work-in-process inventory only
d. Allocate overapplied or underapplied manufacturing overhead to
manufacturing overhead payable - ANSWER b.
11.An overapplication of manufacturing overhead would be corrected by which
entry?
a. Debiting cost of goods sold and crediting manufacturing overhead
b. Debiting manufacturing overhead and crediting cost of goods sold
c. Debiting work-in-process inventory and crediting manufacturing
overhead
d. Debiting finished goods inventory and crediting manufacturing
overhead - ANSWER b.
12.In which case is it appropriate to use job costing?
