WGU PA: Managerial Accounting - Questions With
Stepwise Solutions
Which feature of managerial accounting improves a company's ability to plan
and control operations? Right Ans - It generates detailed information on
product cost.
Which statement describes period costs? Right Ans - They flow directly to
the current income statement as expenses.
A company has the following costs associated with a job:
Direct materials: $400
Direct labor: $450
Work in process: $950
Revenue from job: $1,450
What is the amount of overhead applied to this job? Right Ans - $100
Management wants to assess how many units must be sold to earn a profit.
The most useful analysis will separate costs into which categories? Right
Ans - Fixed and variable
A manufacturing company budgeted for $1,240,000 in manufacturing
overhead and expected 400,000 direct labor hours. Actual overhead was
$1,200,000, and actual direct labor hours were 390,000.
Was manufacturing overhead over- or underapplied and by how much?
Right Ans - Overapplied by $9,000
(($1,240,000/400,000) - ($1,200,000/390,000)) * 390,000
Cost of goods manufactured equals $87,000 for the year. Finished goods
inventory is $10,000 at the beginning of the year and $4,000 at the end of the
year. Beginning and ending work in process are $4,000 and $5,000,
respectively.
How much is cost of goods sold for the year? Right Ans - $93,000
, cost of goods manuf. + finished goods inventory (beg.) - finished goods
inventory (end)
The following information relates to a company's production activities for the
month of October:
(est and actual amounts)
Cost of direct labor
Cost of manufacturing overhead
Direct labor hours
Using direct labor hours as the activity base, what is the predetermined
overhead rate? Right Ans - $24.44 per direct labor hour
est. cost of manuf. overhead/direct labor hours
The following amounts were reported by a company before adjusting its
overapplied manufacturing overhead of $48,000:
Cost of goods sold $730,000
Applied overhead $368,000
Actual overhead $320,000
What is the adjusted cost of goods sold for the year? Right Ans - $682,000
$730,000 - $48,000
cost of goods sold - overapplied manufacturing overhead
The manufacturing operations of a company had the following balances for
the year:
(beg/end balance)
Raw materials ($84,000/$91,000)
Work in process ($45,000/$59,000)
Finished goods ($28,000/$23,000)
The company transferred $918,000 of completed goods out of work in process
during the year. The overhead is underapplied by $3,000.
Stepwise Solutions
Which feature of managerial accounting improves a company's ability to plan
and control operations? Right Ans - It generates detailed information on
product cost.
Which statement describes period costs? Right Ans - They flow directly to
the current income statement as expenses.
A company has the following costs associated with a job:
Direct materials: $400
Direct labor: $450
Work in process: $950
Revenue from job: $1,450
What is the amount of overhead applied to this job? Right Ans - $100
Management wants to assess how many units must be sold to earn a profit.
The most useful analysis will separate costs into which categories? Right
Ans - Fixed and variable
A manufacturing company budgeted for $1,240,000 in manufacturing
overhead and expected 400,000 direct labor hours. Actual overhead was
$1,200,000, and actual direct labor hours were 390,000.
Was manufacturing overhead over- or underapplied and by how much?
Right Ans - Overapplied by $9,000
(($1,240,000/400,000) - ($1,200,000/390,000)) * 390,000
Cost of goods manufactured equals $87,000 for the year. Finished goods
inventory is $10,000 at the beginning of the year and $4,000 at the end of the
year. Beginning and ending work in process are $4,000 and $5,000,
respectively.
How much is cost of goods sold for the year? Right Ans - $93,000
, cost of goods manuf. + finished goods inventory (beg.) - finished goods
inventory (end)
The following information relates to a company's production activities for the
month of October:
(est and actual amounts)
Cost of direct labor
Cost of manufacturing overhead
Direct labor hours
Using direct labor hours as the activity base, what is the predetermined
overhead rate? Right Ans - $24.44 per direct labor hour
est. cost of manuf. overhead/direct labor hours
The following amounts were reported by a company before adjusting its
overapplied manufacturing overhead of $48,000:
Cost of goods sold $730,000
Applied overhead $368,000
Actual overhead $320,000
What is the adjusted cost of goods sold for the year? Right Ans - $682,000
$730,000 - $48,000
cost of goods sold - overapplied manufacturing overhead
The manufacturing operations of a company had the following balances for
the year:
(beg/end balance)
Raw materials ($84,000/$91,000)
Work in process ($45,000/$59,000)
Finished goods ($28,000/$23,000)
The company transferred $918,000 of completed goods out of work in process
during the year. The overhead is underapplied by $3,000.
