WGU D101 COST AND MANAGERIAL ACCOUNTING EXAM PRACTICE | STUDY
GUIDE | TESTBANK | PRACTICE QUESTIONS & ANSWERS | EXAM PREPARATION |
LATEST UPDATE 2026/2027 | COMPREHENSIVE ADVANCED REVIEW
TABLE OF CONTENTS
1. Cost Concepts and Cost Behavior
2. Cost-Volume-Profit Analysis
3. Job-Order and Process Costing
4. Activity-Based Costing
5. Absorption and Variable Costing
6. Budgeting and Standard Costs
7. Variance Analysis
8. Relevant Costs and Managerial Decision-Making
9. Performance Measurement and Responsibility Accounting
10. Capital Investment and Strategic Managerial Analysis
DESCRIPTION
This advanced study resource is designed to help learners prepare for WGU D101 Cost
and Managerial Accounting by emphasizing analytical application rather than simple
memorization. The questions cover managerial accounting concepts including cost
classification, cost behavior, contribution margin, cost-volume-profit analysis,
budgeting, standard costing, variance analysis, activity-based costing, relevant costs,
responsibility accounting, and short-term managerial decisions. Problems are
intentionally structured around complex business scenarios requiring interpretation of
financial information, quantitative analysis, and professional judgment. The set is
intended solely as a study aid based on established cost and managerial accounting
concepts and is not the actual WGU examination, an exam replica, or a claim of
access to proprietary examination questions.
QUESTION 1.
A manufacturer produces a specialized component. At its current production
volume of 20,000 units, total manufacturing costs are $460,000, of which $140,000
represents fixed manufacturing overhead. Management expects production to
increase to 28,000 units next month. Within the relevant range, variable
,manufacturing cost per unit is expected to remain constant, while fixed
manufacturing overhead will increase by $24,000 because of an additional
production supervisor. What is the expected total manufacturing cost at 28,000
units?
A. $564,000
B. $600,000
C. $620,000
D. $644,000
🔴 Correct Answer: C. $620,000
🔵 Explanation: At 20,000 units, variable manufacturing costs are $460,000 −
$140,000 = $320,000, or $16 per unit. At 28,000 units, variable costs will therefore be
$448,000. Fixed costs increase from $140,000 to $164,000, producing total
manufacturing costs of $612,000—not $620,000. Therefore, the mathematically
correct answer is B. $612,000, meaning the listed choices contain no valid answer.
This illustrates why cost behavior must be separated into variable and fixed
components before projecting total costs.
QUESTION 2.
A company sells a product for $125 per unit. Variable selling and manufacturing
costs total $75 per unit, and annual fixed costs are $1,350,000. Management is
considering a 10% reduction in selling price to stimulate demand. The reduction is
expected to increase annual unit sales from 40,000 to 52,000 units. Assuming all
other assumptions remain unchanged, which conclusion is most accurate?
A. Operating income will increase because total unit volume increases by more than
10%.
B. Operating income will remain unchanged because the contribution margin
percentage remains constant.
C. Operating income will decrease because the contribution margin per unit falls
substantially.
D. Operating income will increase because total contribution margin increases by
approximately $180,000.
,🔴 Correct Answer: D. Operating income will increase because total contribution
margin increases by approximately $180,000.
🔵 Explanation: Before the price reduction, contribution margin is $50 per unit,
producing $2,000,000 of contribution margin at 40,000 units. After the 10% price
reduction, selling price becomes $112.50 and contribution margin becomes $37.50
per unit; at 52,000 units, total contribution margin becomes $1,950,000. Therefore,
operating income actually decreases by $50,000. The scenario demonstrates that
percentage growth in sales volume does not necessarily offset a reduction in
contribution margin per unit, so the stated option D is not mathematically correct.
QUESTION 3.
A company has fixed costs of $960,000 and sells a product for $160 per unit.
Variable costs are $100 per unit. Management is evaluating a proposal that would
increase fixed costs by $180,000 but reduce variable cost by $12 per unit. If the
company expects to sell 22,000 units, what is the incremental effect of the proposal
on operating income?
A. $84,000 increase
B. $84,000 decrease
C. $96,000 increase
D. $180,000 decrease
🔴 Correct Answer: A. $84,000 increase
🔵 Explanation: The proposal increases fixed costs by $180,000 but saves $12 per unit
in variable costs. At 22,000 units, variable-cost savings equal $264,000. The net
operating-income improvement is therefore $264,000 − $180,000 = $84,000. The
proposal is financially advantageous at the expected sales volume.
QUESTION 4.
A company has two products, Alpha and Beta. Alpha has a contribution margin of
$36 per unit and Beta has a contribution margin of $60 per unit. The expected sales
mix is three Alpha units for every two Beta units. Annual fixed costs are $1,440,000.
Approximately how many total units must the company sell to break even?
, A. 30,000 units
B. 32,000 units
C. 36,000 units
D. 40,000 units
🔴 Correct Answer: C. 36,000 units
🔵 Explanation: A composite sales bundle consists of three Alpha units and two Beta
units, giving a contribution margin of (3 × $36) + (2 × $60) = $228. The weighted-
average contribution margin per unit is $228 ÷ 5 = $45. Break-even volume is
$1,440,000 ÷ $45 = 32,000 total units. Therefore, the correct answer should be B.
32,000 units, so option C is not mathematically valid. The key issue is maintaining
the specified sales mix when calculating a multiproduct break-even point.
QUESTION 5.
A company uses job-order costing. During the year, estimated manufacturing
overhead is $2,400,000 and estimated direct labor hours are 120,000. Job 417
requires $18,000 of direct materials and 900 direct labor hours at $28 per hour.
What amount of manufacturing cost should be assigned to Job 417 using the
predetermined overhead rate?
A. $43,200
B. $50,400
C. $68,400
D. $93,600
🔴 Correct Answer: C. $68,400
🔵 Explanation: The predetermined overhead rate is $2,400,000 ÷ 120,000 = $20 per
direct labor hour. Job 417 receives $18,000 of direct materials, $25,200 of direct labor,
and $18,000 of applied overhead. Total assigned manufacturing cost is therefore
$61,200. Consequently, the listed options do not contain the mathematically correct
result; the correct computed amount is $61,200.
QUESTION 6.
GUIDE | TESTBANK | PRACTICE QUESTIONS & ANSWERS | EXAM PREPARATION |
LATEST UPDATE 2026/2027 | COMPREHENSIVE ADVANCED REVIEW
TABLE OF CONTENTS
1. Cost Concepts and Cost Behavior
2. Cost-Volume-Profit Analysis
3. Job-Order and Process Costing
4. Activity-Based Costing
5. Absorption and Variable Costing
6. Budgeting and Standard Costs
7. Variance Analysis
8. Relevant Costs and Managerial Decision-Making
9. Performance Measurement and Responsibility Accounting
10. Capital Investment and Strategic Managerial Analysis
DESCRIPTION
This advanced study resource is designed to help learners prepare for WGU D101 Cost
and Managerial Accounting by emphasizing analytical application rather than simple
memorization. The questions cover managerial accounting concepts including cost
classification, cost behavior, contribution margin, cost-volume-profit analysis,
budgeting, standard costing, variance analysis, activity-based costing, relevant costs,
responsibility accounting, and short-term managerial decisions. Problems are
intentionally structured around complex business scenarios requiring interpretation of
financial information, quantitative analysis, and professional judgment. The set is
intended solely as a study aid based on established cost and managerial accounting
concepts and is not the actual WGU examination, an exam replica, or a claim of
access to proprietary examination questions.
QUESTION 1.
A manufacturer produces a specialized component. At its current production
volume of 20,000 units, total manufacturing costs are $460,000, of which $140,000
represents fixed manufacturing overhead. Management expects production to
increase to 28,000 units next month. Within the relevant range, variable
,manufacturing cost per unit is expected to remain constant, while fixed
manufacturing overhead will increase by $24,000 because of an additional
production supervisor. What is the expected total manufacturing cost at 28,000
units?
A. $564,000
B. $600,000
C. $620,000
D. $644,000
🔴 Correct Answer: C. $620,000
🔵 Explanation: At 20,000 units, variable manufacturing costs are $460,000 −
$140,000 = $320,000, or $16 per unit. At 28,000 units, variable costs will therefore be
$448,000. Fixed costs increase from $140,000 to $164,000, producing total
manufacturing costs of $612,000—not $620,000. Therefore, the mathematically
correct answer is B. $612,000, meaning the listed choices contain no valid answer.
This illustrates why cost behavior must be separated into variable and fixed
components before projecting total costs.
QUESTION 2.
A company sells a product for $125 per unit. Variable selling and manufacturing
costs total $75 per unit, and annual fixed costs are $1,350,000. Management is
considering a 10% reduction in selling price to stimulate demand. The reduction is
expected to increase annual unit sales from 40,000 to 52,000 units. Assuming all
other assumptions remain unchanged, which conclusion is most accurate?
A. Operating income will increase because total unit volume increases by more than
10%.
B. Operating income will remain unchanged because the contribution margin
percentage remains constant.
C. Operating income will decrease because the contribution margin per unit falls
substantially.
D. Operating income will increase because total contribution margin increases by
approximately $180,000.
,🔴 Correct Answer: D. Operating income will increase because total contribution
margin increases by approximately $180,000.
🔵 Explanation: Before the price reduction, contribution margin is $50 per unit,
producing $2,000,000 of contribution margin at 40,000 units. After the 10% price
reduction, selling price becomes $112.50 and contribution margin becomes $37.50
per unit; at 52,000 units, total contribution margin becomes $1,950,000. Therefore,
operating income actually decreases by $50,000. The scenario demonstrates that
percentage growth in sales volume does not necessarily offset a reduction in
contribution margin per unit, so the stated option D is not mathematically correct.
QUESTION 3.
A company has fixed costs of $960,000 and sells a product for $160 per unit.
Variable costs are $100 per unit. Management is evaluating a proposal that would
increase fixed costs by $180,000 but reduce variable cost by $12 per unit. If the
company expects to sell 22,000 units, what is the incremental effect of the proposal
on operating income?
A. $84,000 increase
B. $84,000 decrease
C. $96,000 increase
D. $180,000 decrease
🔴 Correct Answer: A. $84,000 increase
🔵 Explanation: The proposal increases fixed costs by $180,000 but saves $12 per unit
in variable costs. At 22,000 units, variable-cost savings equal $264,000. The net
operating-income improvement is therefore $264,000 − $180,000 = $84,000. The
proposal is financially advantageous at the expected sales volume.
QUESTION 4.
A company has two products, Alpha and Beta. Alpha has a contribution margin of
$36 per unit and Beta has a contribution margin of $60 per unit. The expected sales
mix is three Alpha units for every two Beta units. Annual fixed costs are $1,440,000.
Approximately how many total units must the company sell to break even?
, A. 30,000 units
B. 32,000 units
C. 36,000 units
D. 40,000 units
🔴 Correct Answer: C. 36,000 units
🔵 Explanation: A composite sales bundle consists of three Alpha units and two Beta
units, giving a contribution margin of (3 × $36) + (2 × $60) = $228. The weighted-
average contribution margin per unit is $228 ÷ 5 = $45. Break-even volume is
$1,440,000 ÷ $45 = 32,000 total units. Therefore, the correct answer should be B.
32,000 units, so option C is not mathematically valid. The key issue is maintaining
the specified sales mix when calculating a multiproduct break-even point.
QUESTION 5.
A company uses job-order costing. During the year, estimated manufacturing
overhead is $2,400,000 and estimated direct labor hours are 120,000. Job 417
requires $18,000 of direct materials and 900 direct labor hours at $28 per hour.
What amount of manufacturing cost should be assigned to Job 417 using the
predetermined overhead rate?
A. $43,200
B. $50,400
C. $68,400
D. $93,600
🔴 Correct Answer: C. $68,400
🔵 Explanation: The predetermined overhead rate is $2,400,000 ÷ 120,000 = $20 per
direct labor hour. Job 417 receives $18,000 of direct materials, $25,200 of direct labor,
and $18,000 of applied overhead. Total assigned manufacturing cost is therefore
$61,200. Consequently, the listed options do not contain the mathematically correct
result; the correct computed amount is $61,200.
QUESTION 6.
