WGU D101 COST AND MANAGERIAL ACCOUNTING OBJECTIVE ASSESSMENT
EXAM – QUESTIONS AND ANSWERS | EXAM TESTBANK WITH VERIFIED AND
WELL DETAILED ANSWERS | PLUS RATIONALES | DOWNLOAD AND PASS |
LATEST EXAM UPDATE 2026/2027
Core Domains:
Cost Terminology and Classification
Cost-Volume-Profit (CVP) Analysis
Job Order and Process Costing
Activity-Based Costing (ABC)
Budgeting and Variance Analysis
Relevant Costs and Decision-Making
Capital Budgeting and Investment Decisions
Performance Measurement and Balanced Scorecard
Ethical Standards and Professional Conduct
Introduction
This comprehensive objective assessment is designed to evaluate a candidate's
mastery of cost and managerial accounting principles as prescribed in the WGU
D101 curriculum. The exam assesses a deep understanding of cost behavior, product
costing, budgeting, and strategic decision-making tools. It is structured with
multiple-choice questions and scenario-based applications to test both foundational
knowledge and higher-order critical thinking skills. Candidates must demonstrate
the ability to apply concepts to real-world business problems, interpret financial
data, and make informed managerial decisions. Success requires a synthesis of
,technical proficiency and professional judgment, adhering to the ethical standards
of the accounting profession.
Section One: Questions 1 – 100
Question 1
Which of the following is a period cost?
A. Direct materials
B. Factory depreciation
C. Sales commissions
D. Direct labor
🟢 C. Sales commissions
🔴 Explanation: Period costs are expensed in the period incurred and are not
attached to inventory. Sales commissions are selling expenses, which are period
costs. Direct materials, direct labor, and factory depreciation are product costs
that are inventoriable.
Question 2
A manufacturing company uses a predetermined overhead rate based on
machine hours. At the beginning of the year, estimated overhead was $500,000
and estimated machine hours were 20,000. Actual overhead was $520,000 and
actual machine hours were 22,000. What is the predetermined overhead rate?
,A. $23.64
B. $25.00
C. $26.00
D. $24.00
🟢 B. $25.00
🔴 Explanation: Predetermined overhead rate is calculated as estimated overhead
divided by estimated activity level. $500,,000 machine hours = $25.00 per
machine hour. Actual costs are not used in the predetermined rate.
Question 3
In a job order costing system, the cost of raw materials purchased on account is
recorded with a debit to:
A. Work-in-Process Inventory
B. Finished Goods Inventory
C. Raw Materials Inventory
D. Cost of Goods Sold
🟢 C. Raw Materials Inventory
🔴 Explanation: Raw materials purchased on account are recorded as a debit to
Raw Materials Inventory and a credit to Accounts Payable. The materials are only
moved to Work-in-Process when they are issued to production.
Question 4
Which of the following is a variable cost?
, A. Factory rent
B. Depreciation on equipment (straight-line)
C. Direct materials
D. Salaries of administrative staff
🟢 C. Direct materials
🔴 Explanation: A variable cost changes in total directly and proportionately with
changes in activity. Direct materials increase with production volume. Factory rent,
straight-line depreciation, and administrative salaries are fixed costs.
Question 5
The contribution margin ratio is calculated as:
A. Sales divided by variable expenses
B. Contribution margin divided by sales
C. Fixed expenses divided by contribution margin
D. Sales minus variable expenses
🟢 B. Contribution margin divided by sales
🔴 Explanation: The contribution margin ratio measures the percentage of each
sales dollar available to cover fixed costs and generate profit. It is calculated as
Contribution Margin / Sales.
Question 6
A company has sales of $200,000, variable costs of $120,000, and fixed costs of
$60,000. What is the degree of operating leverage?
EXAM – QUESTIONS AND ANSWERS | EXAM TESTBANK WITH VERIFIED AND
WELL DETAILED ANSWERS | PLUS RATIONALES | DOWNLOAD AND PASS |
LATEST EXAM UPDATE 2026/2027
Core Domains:
Cost Terminology and Classification
Cost-Volume-Profit (CVP) Analysis
Job Order and Process Costing
Activity-Based Costing (ABC)
Budgeting and Variance Analysis
Relevant Costs and Decision-Making
Capital Budgeting and Investment Decisions
Performance Measurement and Balanced Scorecard
Ethical Standards and Professional Conduct
Introduction
This comprehensive objective assessment is designed to evaluate a candidate's
mastery of cost and managerial accounting principles as prescribed in the WGU
D101 curriculum. The exam assesses a deep understanding of cost behavior, product
costing, budgeting, and strategic decision-making tools. It is structured with
multiple-choice questions and scenario-based applications to test both foundational
knowledge and higher-order critical thinking skills. Candidates must demonstrate
the ability to apply concepts to real-world business problems, interpret financial
data, and make informed managerial decisions. Success requires a synthesis of
,technical proficiency and professional judgment, adhering to the ethical standards
of the accounting profession.
Section One: Questions 1 – 100
Question 1
Which of the following is a period cost?
A. Direct materials
B. Factory depreciation
C. Sales commissions
D. Direct labor
🟢 C. Sales commissions
🔴 Explanation: Period costs are expensed in the period incurred and are not
attached to inventory. Sales commissions are selling expenses, which are period
costs. Direct materials, direct labor, and factory depreciation are product costs
that are inventoriable.
Question 2
A manufacturing company uses a predetermined overhead rate based on
machine hours. At the beginning of the year, estimated overhead was $500,000
and estimated machine hours were 20,000. Actual overhead was $520,000 and
actual machine hours were 22,000. What is the predetermined overhead rate?
,A. $23.64
B. $25.00
C. $26.00
D. $24.00
🟢 B. $25.00
🔴 Explanation: Predetermined overhead rate is calculated as estimated overhead
divided by estimated activity level. $500,,000 machine hours = $25.00 per
machine hour. Actual costs are not used in the predetermined rate.
Question 3
In a job order costing system, the cost of raw materials purchased on account is
recorded with a debit to:
A. Work-in-Process Inventory
B. Finished Goods Inventory
C. Raw Materials Inventory
D. Cost of Goods Sold
🟢 C. Raw Materials Inventory
🔴 Explanation: Raw materials purchased on account are recorded as a debit to
Raw Materials Inventory and a credit to Accounts Payable. The materials are only
moved to Work-in-Process when they are issued to production.
Question 4
Which of the following is a variable cost?
, A. Factory rent
B. Depreciation on equipment (straight-line)
C. Direct materials
D. Salaries of administrative staff
🟢 C. Direct materials
🔴 Explanation: A variable cost changes in total directly and proportionately with
changes in activity. Direct materials increase with production volume. Factory rent,
straight-line depreciation, and administrative salaries are fixed costs.
Question 5
The contribution margin ratio is calculated as:
A. Sales divided by variable expenses
B. Contribution margin divided by sales
C. Fixed expenses divided by contribution margin
D. Sales minus variable expenses
🟢 B. Contribution margin divided by sales
🔴 Explanation: The contribution margin ratio measures the percentage of each
sales dollar available to cover fixed costs and generate profit. It is calculated as
Contribution Margin / Sales.
Question 6
A company has sales of $200,000, variable costs of $120,000, and fixed costs of
$60,000. What is the degree of operating leverage?
