Principles of Financial &
Managerial Accounting
D196 WGU 2026 | Prep
Q&A Review and
Rationales
|Graded A+ | Guaranteed
success|
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales
Included
, the production budget Sales budget + ending finished goods inventory - beginning finished goods
inventory
direct materials production budget Production budget × direct materials per unit
the direct materials purchases budget Direct materials production budget + ending direct materials inventory -
beginning direct materials inventory
Cash collected from customers (current period revenue × current period collection rate) + cash collected from
previous period sales
Cash payments to suppliers (current period purchases × current period payment rate) + cash paid on
previous period purchases
Cost Variance Difference between actual costs and budgeted costs
Contribution Margin = 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 = Sales Revenue - Variable Costs - Fixed Costs
A profit level desired by management.
At break-even Target income = 0
Sales Revenue = Sales Price x Number of Units
Variable Costs = 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 Variable Costs
Unit-level activities Activities that take place each time a unit of product is produced.
Batch-level activities Activities that take place in order to support a batch or production run, regardless
of the size of the batch.
Product-line Activities Activities that take place in order to support a product line, regardless of the
number of batches or individual units produced.
cost pool Total cost being generated by a specific overhead cost activity.
Managerial Accounting
D196 WGU 2026 | Prep
Q&A Review and
Rationales
|Graded A+ | Guaranteed
success|
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales
Included
, the production budget Sales budget + ending finished goods inventory - beginning finished goods
inventory
direct materials production budget Production budget × direct materials per unit
the direct materials purchases budget Direct materials production budget + ending direct materials inventory -
beginning direct materials inventory
Cash collected from customers (current period revenue × current period collection rate) + cash collected from
previous period sales
Cash payments to suppliers (current period purchases × current period payment rate) + cash paid on
previous period purchases
Cost Variance Difference between actual costs and budgeted costs
Contribution Margin = 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 = Sales Revenue - Variable Costs - Fixed Costs
A profit level desired by management.
At break-even Target income = 0
Sales Revenue = Sales Price x Number of Units
Variable Costs = 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 Variable Costs
Unit-level activities Activities that take place each time a unit of product is produced.
Batch-level activities Activities that take place in order to support a batch or production run, regardless
of the size of the batch.
Product-line Activities Activities that take place in order to support a product line, regardless of the
number of batches or individual units produced.
cost pool Total cost being generated by a specific overhead cost activity.
