WGU D101 Cost and Managerial Accounting 2023/2024 Exam

What is a price taker? - ANSWER-A company that has to accept the price that the market sets for a good. They have no influence over setting the price. What is a price maker? - ANSWER-a firm possessing the power to set the price within the market. They still need to track all costs in order to make sure they are making an adequate return. What is the major purpose and use of job order costing? a. To create a system that tracks both manufacturing and period costs and assigns both to products b. To create a system in which manufacturing costs are tracked by period instead of by products c. To create a system in which manufacturing costs are accumulated by separate product orders or batches d. To create a system that is exclusively used by price makers and not by price takers - ANSWER-c. Which statement is true? a. Having accurate product or service cost information is important for both price takers and price makers. b. Having accurate product or service cost information is important for price takers, but not price makers. c. Having accurate produce or service cost information is not important for either price takers or price makers. d. Having accurate product or service cost information is important for price makers, but not price takers. - ANSWER-a. Two competitors exist in the same industry. The first company has accurate product cost information while the second company does not. What is the reason behind why the first company is more successful than the second? a. With accurate job cost information, the first company can undercut the second company's prices, thus driving the second company out of business. b. With accurate job cost information, the first company can set prices that guarantee making a profit, can understand which costs need to be worked on, and can determine which actions can be taken to make the company more efficient and profitable. c. With accurate job cost information, the first company can pay higher wages to employees, thus motivating them more than the employees of the second company. d. With accurate job cost information, the first company can set prices higher than the second company, thus earning higher profits. - ANSWER-b. Job order costing is appropriate when which two conditions exist? a. Products produced are all the same, and the manufacturing processes used to produce them are the same. b. Products produced are distinct from each other, and the manufacturing processes used are different for different products. c. Products produced are distinct, but the manufacturing processes used are the same for different products. d. Products produced are all the same, but the manufacturing processes used to produce them are different for different products. - ANSWER-b. Why is having accurate product cost information important? a. So manufacturers can charge a price based on costs and a reasonable markup b. So companies can minimize the profits they are earning c. So manufacturers can charge a price based on estimated product costs, not including a reasonable markup d. So companies can grow faster than all competitors in their industry - ANSWER-a. Which type of company should use job order costing? a. Air filter manufacturer b. Soda bottler c. Paper towel manufacturer d. Commercial aircraft manufacturer - ANSWER-d. What is a condition to using job order costing? a. Tracking total direct materials for a given period of time