WGU D101 COST AND MANAGERIAL
ACCOUNTING PA EXAMPREP QUESTIONS AND
DETAILED SOLUTIONS
◉ An entrepreneur identifies a business opportunity to produce and
market custom-printed T-shirts to local organizations. The
entrepreneur plans to use activity-based costing.
Which type of costs should be associated to the production of each
custom-printed T-shirt in the future using cost drivers?
Direct labor costs only
Direct materials costs only
All the manufacturing costs including direct materials and direct
labor
All the manufacturing costs except for direct materials and direct
labor
Answer: All the manufacturing costs except for direct materials and
direct labor
◉ Implementation of an activity-based costing (ABC) system
requires an analysis of the percentage of time employees spend on
each overhead cost activity.
Through which activity can these data be gathered?
General ledger posting
,Employee wage ranking
Employee interviews
Equivalent unit analysis
Answer: Employee interviews
◉ Which output measures are most important to a manager when
maximizing operational performance?
Sales volume and labor hours worked
Production volume and labor hours worked
Sales and production volume
Production volume and machine hours worked
Answer: Sales and production volume
◉ A juice company reports these data:
Selling price per unit: $7
Variable cost per unit: $3
Number of units sold: 70,000 units
Net income: $60,000
What is the juice company's calculated break-even point in number
of units?
25,000 units
30,000 units
, 40,000 units
55,000 units
Answer: 55,000 units
◉ A toy company reports these cost data:
Actual Results
Total manufacturing overhead: $35,000
Number of units produced: 3,000
Number of labor hours worked: 8,000
The company has established these standards:
Total manufacturing overhead: $36,000
Number of direct labor hours worked: 9,000
What is the variable manufacturing overhead spending variance?
$3,000 F
$3,000 U
$8,000 F
$8,000 U
Answer: $3,000 U
◉ What is a common cause for a favorable materials price variance?
Purchasing higher quality materials
Purchasing materials without quantity-related vendor discounts
ACCOUNTING PA EXAMPREP QUESTIONS AND
DETAILED SOLUTIONS
◉ An entrepreneur identifies a business opportunity to produce and
market custom-printed T-shirts to local organizations. The
entrepreneur plans to use activity-based costing.
Which type of costs should be associated to the production of each
custom-printed T-shirt in the future using cost drivers?
Direct labor costs only
Direct materials costs only
All the manufacturing costs including direct materials and direct
labor
All the manufacturing costs except for direct materials and direct
labor
Answer: All the manufacturing costs except for direct materials and
direct labor
◉ Implementation of an activity-based costing (ABC) system
requires an analysis of the percentage of time employees spend on
each overhead cost activity.
Through which activity can these data be gathered?
General ledger posting
,Employee wage ranking
Employee interviews
Equivalent unit analysis
Answer: Employee interviews
◉ Which output measures are most important to a manager when
maximizing operational performance?
Sales volume and labor hours worked
Production volume and labor hours worked
Sales and production volume
Production volume and machine hours worked
Answer: Sales and production volume
◉ A juice company reports these data:
Selling price per unit: $7
Variable cost per unit: $3
Number of units sold: 70,000 units
Net income: $60,000
What is the juice company's calculated break-even point in number
of units?
25,000 units
30,000 units
, 40,000 units
55,000 units
Answer: 55,000 units
◉ A toy company reports these cost data:
Actual Results
Total manufacturing overhead: $35,000
Number of units produced: 3,000
Number of labor hours worked: 8,000
The company has established these standards:
Total manufacturing overhead: $36,000
Number of direct labor hours worked: 9,000
What is the variable manufacturing overhead spending variance?
$3,000 F
$3,000 U
$8,000 F
$8,000 U
Answer: $3,000 U
◉ What is a common cause for a favorable materials price variance?
Purchasing higher quality materials
Purchasing materials without quantity-related vendor discounts
