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WGU C213 PRE-ASSESSMENT ACTUAL EXAM 2026/2027 |
Accounting for Decision Makers PVAC Domains | Verified
Answers | Pass Guaranteed - A+ Graded
Section P: Planning, Controlling & Evaluating - Budgeting & Variance Analysis (Q1-
15)
Q1. Which budget serves as the foundation for the entire master budget process
because all other operating and financial budgets derive from its projections?
A. Production budget
B. Cash budget
C. Sales budget
D. Budgeted balance sheet
C. Sales budget [CORRECT]
Rationale: The sales budget is prepared first because production levels, inventory
needs, purchasing requirements, and cash collections all depend on projected sales
volume and selling price. (Competency Domain: P - Planning)
Correct Answer: C
Q2. A company plans to sell 10,000 units during the quarter and desires ending
finished goods inventory equal to 20% of the next quarter's budgeted sales of 12,000
units. Beginning inventory is 1,500 units. How many units must be produced?
A. 10,000 units
B. 10,200 units
C. 10,500 units
D. 10,900 units
C. 10,500 units [CORRECT]
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Rationale: Production budget formula is Budgeted Sales + Desired Ending Inventory
(20% × 12,000 = 2,400) - Beginning Inventory (1,500) = 10,500 units required for
production. (Competency Domain: P - Planning)
Correct Answer: C
Q3. A company has sales of $500,000 with 60% collected in the month of sale and
40% in the following month. February sales are $400,000 and March sales are
$500,000. What are total budgeted cash collections in March?
A. $400,000
B. $460,000
C. $500,000
D. $540,000
B. $460,000 [CORRECT]
Rationale: March cash collections include 60% of March sales ($300,000) plus 40% of
February sales ($160,000), totaling $460,000 based on the historical collection
pattern. (Competency Domain: P - Planning)
Correct Answer: B
Q4. A company's direct materials budget shows 5,000 units to be produced, requiring
3 pounds of raw material per unit. Desired ending raw materials inventory is 1,200
pounds and beginning inventory is 800 pounds. How many pounds must be
purchased?
A. 14,800 pounds
B. 15,000 pounds
C. 15,200 pounds
D. 15,400 pounds
D. 15,400 pounds [CORRECT]
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Rationale: Direct materials purchases equal production requirements (5,000 × 3 =
15,000) plus desired ending inventory (1,200) minus beginning inventory (800),
resulting in 15,400 pounds. (Competency Domain: P - Planning)
Correct Answer: D
Q5. Which of the following is classified as a financial budget rather than an operating
budget within the master budget?
A. Production budget
B. Selling and administrative expense budget
C. Cash budget
D. Direct materials budget
C. Cash budget [CORRECT]
Rationale: The cash budget is a financial budget because it projects cash inflows and
outflows; operating budgets include sales, production, materials, labor, and overhead
budgets. (Competency Domain: P - Planning)
Correct Answer: C
Q6. A company budgets 8,000 units with variable costs of $12 per unit and fixed
costs of $40,000. Actual production is 9,000 units. What is the flexible budget total
cost?
A. $136,000
B. $148,000
C. $152,000
D. $156,000
B. $148,000 [CORRECT]
Rationale: A flexible budget adjusts variable costs for actual activity (9,000 × $12 =
$108,000) while keeping fixed costs constant ($40,000), yielding total budgeted costs
of $148,000 at the actual volume. (Competency Domain: P - Controlling)
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Correct Answer: B
Q7. A company budgeted 5,000 direct labor hours at $15 per hour. Actual hours
worked were 5,200 at an actual rate of $14.50 per hour. What is the direct labor rate
variance?
A. $2,600 Favorable
B. $2,600 Unfavorable
C. $3,000 Favorable
D. $3,000 Unfavorable
A. $2,600 Favorable [CORRECT]
Rationale: The labor rate variance equals (Actual Rate - Standard Rate) × Actual
Hours = ($14.50 - $15.00) × 5,200 = $2,600 Favorable because the actual rate paid
was below standard. (Competency Domain: P - Controlling)
Correct Answer: A
Q8. Standard material cost is 2 pounds at $4 per pound for each unit. Actual
production was 10,000 units using 21,000 pounds at $4.10 per pound. What is the
material quantity variance?
A. $2,000 Favorable
B. $4,000 Favorable
C. $4,000 Unfavorable
D. $2,000 Unfavorable
C. $4,000 Unfavorable [CORRECT]
Rationale: The material quantity variance equals (Actual Quantity - Standard Quantity
Allowed) × Standard Price = (21,000 - 20,000) × $4 = $4,000 Unfavorable because
more material was used than the standard allowed. (Competency Domain: P -
Controlling)
Correct Answer: C
WGU C213 PRE-ASSESSMENT ACTUAL EXAM 2026/2027 |
Accounting for Decision Makers PVAC Domains | Verified
Answers | Pass Guaranteed - A+ Graded
Section P: Planning, Controlling & Evaluating - Budgeting & Variance Analysis (Q1-
15)
Q1. Which budget serves as the foundation for the entire master budget process
because all other operating and financial budgets derive from its projections?
A. Production budget
B. Cash budget
C. Sales budget
D. Budgeted balance sheet
C. Sales budget [CORRECT]
Rationale: The sales budget is prepared first because production levels, inventory
needs, purchasing requirements, and cash collections all depend on projected sales
volume and selling price. (Competency Domain: P - Planning)
Correct Answer: C
Q2. A company plans to sell 10,000 units during the quarter and desires ending
finished goods inventory equal to 20% of the next quarter's budgeted sales of 12,000
units. Beginning inventory is 1,500 units. How many units must be produced?
A. 10,000 units
B. 10,200 units
C. 10,500 units
D. 10,900 units
C. 10,500 units [CORRECT]
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Rationale: Production budget formula is Budgeted Sales + Desired Ending Inventory
(20% × 12,000 = 2,400) - Beginning Inventory (1,500) = 10,500 units required for
production. (Competency Domain: P - Planning)
Correct Answer: C
Q3. A company has sales of $500,000 with 60% collected in the month of sale and
40% in the following month. February sales are $400,000 and March sales are
$500,000. What are total budgeted cash collections in March?
A. $400,000
B. $460,000
C. $500,000
D. $540,000
B. $460,000 [CORRECT]
Rationale: March cash collections include 60% of March sales ($300,000) plus 40% of
February sales ($160,000), totaling $460,000 based on the historical collection
pattern. (Competency Domain: P - Planning)
Correct Answer: B
Q4. A company's direct materials budget shows 5,000 units to be produced, requiring
3 pounds of raw material per unit. Desired ending raw materials inventory is 1,200
pounds and beginning inventory is 800 pounds. How many pounds must be
purchased?
A. 14,800 pounds
B. 15,000 pounds
C. 15,200 pounds
D. 15,400 pounds
D. 15,400 pounds [CORRECT]
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Rationale: Direct materials purchases equal production requirements (5,000 × 3 =
15,000) plus desired ending inventory (1,200) minus beginning inventory (800),
resulting in 15,400 pounds. (Competency Domain: P - Planning)
Correct Answer: D
Q5. Which of the following is classified as a financial budget rather than an operating
budget within the master budget?
A. Production budget
B. Selling and administrative expense budget
C. Cash budget
D. Direct materials budget
C. Cash budget [CORRECT]
Rationale: The cash budget is a financial budget because it projects cash inflows and
outflows; operating budgets include sales, production, materials, labor, and overhead
budgets. (Competency Domain: P - Planning)
Correct Answer: C
Q6. A company budgets 8,000 units with variable costs of $12 per unit and fixed
costs of $40,000. Actual production is 9,000 units. What is the flexible budget total
cost?
A. $136,000
B. $148,000
C. $152,000
D. $156,000
B. $148,000 [CORRECT]
Rationale: A flexible budget adjusts variable costs for actual activity (9,000 × $12 =
$108,000) while keeping fixed costs constant ($40,000), yielding total budgeted costs
of $148,000 at the actual volume. (Competency Domain: P - Controlling)
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Correct Answer: B
Q7. A company budgeted 5,000 direct labor hours at $15 per hour. Actual hours
worked were 5,200 at an actual rate of $14.50 per hour. What is the direct labor rate
variance?
A. $2,600 Favorable
B. $2,600 Unfavorable
C. $3,000 Favorable
D. $3,000 Unfavorable
A. $2,600 Favorable [CORRECT]
Rationale: The labor rate variance equals (Actual Rate - Standard Rate) × Actual
Hours = ($14.50 - $15.00) × 5,200 = $2,600 Favorable because the actual rate paid
was below standard. (Competency Domain: P - Controlling)
Correct Answer: A
Q8. Standard material cost is 2 pounds at $4 per pound for each unit. Actual
production was 10,000 units using 21,000 pounds at $4.10 per pound. What is the
material quantity variance?
A. $2,000 Favorable
B. $4,000 Favorable
C. $4,000 Unfavorable
D. $2,000 Unfavorable
C. $4,000 Unfavorable [CORRECT]
Rationale: The material quantity variance equals (Actual Quantity - Standard Quantity
Allowed) × Standard Price = (21,000 - 20,000) × $4 = $4,000 Unfavorable because
more material was used than the standard allowed. (Competency Domain: P -
Controlling)
Correct Answer: C
