WGU D101
WGU D101 Cost and Managerial Accounting |OA|
Objective Assessment | 109 Actual Questions and
Answers (Verified Answers), 100% Guaranteed Pass ||
Complete A+ Guide
Testbankscove
,Question 1
In addition to better cost allocation, what benefit comes from creating
and using an ABC overhead allocation system?
a. Reduction in both sales and income taxes
b. Better understanding of the underlying business processes
c. Increase in selling prices through demand management maximization
d. Reduction in direct labor costs
Correct Answer: b. Better understanding of the underlying business
processes
Rationale: In the right setting, when a company's operations involve a
variety of different products and processes, ABC analysis not only
results in a better allocation of overhead costs, but it also results in
a better understanding of the underlying business processes when
those business processes are analyzed.
Question 2
What is important to consider when determining how to allocate
overhead costs to a product or a production process?
a. Determining what factors are causing direct labor costs to be incurred
b. Determining what factors are causing all manufacturing costs to be incurred
c. Determining what factors are causing direct materials costs to be incurred
d. Determining what factors are causing overhead costs to be incurred
,Correct Answer: d. Determining what factors are causing overhead
costs to be incurred
Rationale: It is important when determining how to allocate overhead
costs to a product or production process to consider what factors are
causing overhead costs to be incurred in the manufacturing process in
the first place.
Question 3
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
Correct Answer: 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
Rationale: While the most common method is to close the balance
to cost of goods sold, an alternative is to prorate the overapplied or
underapplied amount among Work-in-Process Inventory, Finished Goods
Inventory, and Cost of Goods Sold based on their ending balances.
, Question 4
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.
Correct Answer: c. ABC considers nonmanufacturing and manufacturing costs.
Rationale: ABC considers both nonmanufacturing and manufacturing
costs, which can be associated, both directly and indirectly, in the
manufacturing of a product.
Question 5
The costs of ending work-in-process inventory is calculated by
which of the following formulas?
a. Cost per unit for conversion costs times the number of
equivalent units for conversion costs
b. Cost per unit of direct materials times equivalent units for
materials plus conversion costs per unit times the number of
equivalent units for conversion costs
c. Cost per unit for direct materials times equivalent units for
materials minus conversion costs per unit times the number of
equivalent units for conversion costs
d. Cost for direct materials per unit times the number of equivalent
units for direct materials
Correct Answer: b. Cost per unit of direct materials times
equivalent units for materials plus conversion costs per unit times
the number of equivalent units for conversion costs
WGU D101 Cost and Managerial Accounting |OA|
Objective Assessment | 109 Actual Questions and
Answers (Verified Answers), 100% Guaranteed Pass ||
Complete A+ Guide
Testbankscove
,Question 1
In addition to better cost allocation, what benefit comes from creating
and using an ABC overhead allocation system?
a. Reduction in both sales and income taxes
b. Better understanding of the underlying business processes
c. Increase in selling prices through demand management maximization
d. Reduction in direct labor costs
Correct Answer: b. Better understanding of the underlying business
processes
Rationale: In the right setting, when a company's operations involve a
variety of different products and processes, ABC analysis not only
results in a better allocation of overhead costs, but it also results in
a better understanding of the underlying business processes when
those business processes are analyzed.
Question 2
What is important to consider when determining how to allocate
overhead costs to a product or a production process?
a. Determining what factors are causing direct labor costs to be incurred
b. Determining what factors are causing all manufacturing costs to be incurred
c. Determining what factors are causing direct materials costs to be incurred
d. Determining what factors are causing overhead costs to be incurred
,Correct Answer: d. Determining what factors are causing overhead
costs to be incurred
Rationale: It is important when determining how to allocate overhead
costs to a product or production process to consider what factors are
causing overhead costs to be incurred in the manufacturing process in
the first place.
Question 3
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
Correct Answer: 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
Rationale: While the most common method is to close the balance
to cost of goods sold, an alternative is to prorate the overapplied or
underapplied amount among Work-in-Process Inventory, Finished Goods
Inventory, and Cost of Goods Sold based on their ending balances.
, Question 4
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.
Correct Answer: c. ABC considers nonmanufacturing and manufacturing costs.
Rationale: ABC considers both nonmanufacturing and manufacturing
costs, which can be associated, both directly and indirectly, in the
manufacturing of a product.
Question 5
The costs of ending work-in-process inventory is calculated by
which of the following formulas?
a. Cost per unit for conversion costs times the number of
equivalent units for conversion costs
b. Cost per unit of direct materials times equivalent units for
materials plus conversion costs per unit times the number of
equivalent units for conversion costs
c. Cost per unit for direct materials times equivalent units for
materials minus conversion costs per unit times the number of
equivalent units for conversion costs
d. Cost for direct materials per unit times the number of equivalent
units for direct materials
Correct Answer: b. Cost per unit of direct materials times
equivalent units for materials plus conversion costs per unit times
the number of equivalent units for conversion costs
