Pass WGU D196 OA 2026 | Principles of Financial
and Managerial Accounting Practice Test Bank
1. What is the formula to calculate the contribution margin?
Total sales revenue - Variable costs
Total sales revenue + Fixed costs
Variable costs / Number of units sold
Total sales revenue / Number of units sold
2. What budget is the first budget prepared?
Production Budget
Sales Budget
3. Which is not an example of a cost driver?
Machine hours.
General and administrative expenses.
Number of inspections.
Number of different customers.
4. What do accountants do?
, Tell a business owner how to spend their money
Measure how much money is spent
Measure, record and report on an individual or business'
financial activities
Count pennies
5. Describe the components that make up actual manufacturing overhead
, in a production environment.
Actual manufacturing overhead includes only fixed costs.
Actual manufacturing overhead consists of direct labor and
direct materials.
Actual manufacturing overhead is the total of all production
costs.
Actual manufacturing overhead consists of indirect costs such as
indirect labor, indirect materials, and other overhead expenses.
6. Sunk costs are irrelevant in making decisions:
true
false
7. What classification do the wages of production supervisors fall under in a manufacturing
company?
Manufacturing overhead
Selling expenses
Direct labor
Administrative expenses
8. If a company sells goods to a related party at a price significantly lower than market
value, how might this affect the company's financial statements?
It would have no effect on the financial statements.
It would improve the company's cash flow.
, It could lead to distorted financial results and
misrepresentation of revenue.
and Managerial Accounting Practice Test Bank
1. What is the formula to calculate the contribution margin?
Total sales revenue - Variable costs
Total sales revenue + Fixed costs
Variable costs / Number of units sold
Total sales revenue / Number of units sold
2. What budget is the first budget prepared?
Production Budget
Sales Budget
3. Which is not an example of a cost driver?
Machine hours.
General and administrative expenses.
Number of inspections.
Number of different customers.
4. What do accountants do?
, Tell a business owner how to spend their money
Measure how much money is spent
Measure, record and report on an individual or business'
financial activities
Count pennies
5. Describe the components that make up actual manufacturing overhead
, in a production environment.
Actual manufacturing overhead includes only fixed costs.
Actual manufacturing overhead consists of direct labor and
direct materials.
Actual manufacturing overhead is the total of all production
costs.
Actual manufacturing overhead consists of indirect costs such as
indirect labor, indirect materials, and other overhead expenses.
6. Sunk costs are irrelevant in making decisions:
true
false
7. What classification do the wages of production supervisors fall under in a manufacturing
company?
Manufacturing overhead
Selling expenses
Direct labor
Administrative expenses
8. If a company sells goods to a related party at a price significantly lower than market
value, how might this affect the company's financial statements?
It would have no effect on the financial statements.
It would improve the company's cash flow.
, It could lead to distorted financial results and
misrepresentation of revenue.
