WGU D559 / C253 ADVANCED MANAGERIAL ACCOUNTING
EXAM PREP 2026- 200 Practice Questions & Detailed Answers
| OA Objective Assessment | Verified Solutions
SECTION 1: PRODUCT COSTING – JOBORDER COSTING (Questions 125)
Question 1
A manufacturing company uses a joborder costing system. Which of the following industries would most
likely use joborder costing?
A) A soft drink manufacturer
B) A custom furniture manufacturer
C) A paper mill
D) A petroleum refinery
Answer: B) A custom furniture manufacturer
Rationale: Joborder costing is used when products are unique, custommade, or produced in small
batches. Custom furniture manufacturing fits this description because each piece is made to customer
specifications. Soft drinks, paper, and petroleum are produced using process costing due to continuous,
homogeneous production.
Question 2
In a joborder costing system, manufacturing overhead is applied to jobs using which of the following?
A) Actual overhead costs incurred
B) A predetermined overhead rate
C) Direct labor cost only
D) Direct materials cost only
,Answer: B) A predetermined overhead rate
Rationale: Manufacturing overhead is applied using a predetermined overhead rate calculated before
the period begins. This allows overhead to be assigned to jobs throughout the period rather than
waiting until actual costs are known.
Question 3
The predetermined overhead rate is calculated as:
A) Actual overhead costs ÷ Actual activity level
B) Estimated total manufacturing overhead costs ÷ Estimated total activity base
C) Actual overhead costs ÷ Estimated activity base
D) Estimated overhead costs ÷ Actual activity level
Answer: B) Estimated total manufacturing overhead costs ÷ Estimated total activity base
Rationale: The predetermined overhead rate is computed before the period begins using estimated
amounts. The formula is: Estimated Total Manufacturing Overhead Cost ÷ Estimated Total Activity Base.
Question 4
A company estimates annual manufacturing overhead of $500,000 and estimates annual direct labor
hours of 25,000. What is the predetermined overhead rate?
A) $20.00 per direct labor hour
B) $15.00 per direct labor hour
C) $25.00 per direct labor hour
D) $10.00 per direct labor hour
,Answer: A) $20.00 per direct labor hour
Rationale: Predetermined overhead rate = Estimated overhead ÷ Estimated activity = $500,000 ÷ 25,000
= $20.00 per direct labor hour.
Question 5
A job uses 120 direct labor hours. The predetermined overhead rate is $18 per direct labor hour. What is
the applied overhead for this job?
A) $1,800
B) $2,160
C) $2,400
D) $1,920
Answer: B) $2,160
Rationale: Applied overhead = Predetermined overhead rate × Actual activity = $18 × 120 = $2,160.
Question 6
What document is used to accumulate the costs of a specific job in a joborder costing system?
A) Materials requisition form
B) Job cost sheet
C) Time ticket
D) Production order
Answer: B) Job cost sheet
, Rationale: The job cost sheet is the primary document used to accumulate all costs (direct materials,
direct labor, and manufacturing overhead) for a specific job.
Question 7
When direct materials are issued to a job, which account is debited?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
Answer: B) Work in Process Inventory
Rationale: When direct materials are used in production, the cost is transferred from Raw Materials
Inventory to Work in Process Inventory. The entry is: Debit Work in Process Inventory, Credit Raw
Materials Inventory.
Question 8
When manufacturing overhead is applied to a job, which account is credited?
A) Work in Process Inventory
B) Manufacturing Overhead
C) Finished Goods Inventory
D) Cost of Goods Sold
Answer: B) Manufacturing Overhead
EXAM PREP 2026- 200 Practice Questions & Detailed Answers
| OA Objective Assessment | Verified Solutions
SECTION 1: PRODUCT COSTING – JOBORDER COSTING (Questions 125)
Question 1
A manufacturing company uses a joborder costing system. Which of the following industries would most
likely use joborder costing?
A) A soft drink manufacturer
B) A custom furniture manufacturer
C) A paper mill
D) A petroleum refinery
Answer: B) A custom furniture manufacturer
Rationale: Joborder costing is used when products are unique, custommade, or produced in small
batches. Custom furniture manufacturing fits this description because each piece is made to customer
specifications. Soft drinks, paper, and petroleum are produced using process costing due to continuous,
homogeneous production.
Question 2
In a joborder costing system, manufacturing overhead is applied to jobs using which of the following?
A) Actual overhead costs incurred
B) A predetermined overhead rate
C) Direct labor cost only
D) Direct materials cost only
,Answer: B) A predetermined overhead rate
Rationale: Manufacturing overhead is applied using a predetermined overhead rate calculated before
the period begins. This allows overhead to be assigned to jobs throughout the period rather than
waiting until actual costs are known.
Question 3
The predetermined overhead rate is calculated as:
A) Actual overhead costs ÷ Actual activity level
B) Estimated total manufacturing overhead costs ÷ Estimated total activity base
C) Actual overhead costs ÷ Estimated activity base
D) Estimated overhead costs ÷ Actual activity level
Answer: B) Estimated total manufacturing overhead costs ÷ Estimated total activity base
Rationale: The predetermined overhead rate is computed before the period begins using estimated
amounts. The formula is: Estimated Total Manufacturing Overhead Cost ÷ Estimated Total Activity Base.
Question 4
A company estimates annual manufacturing overhead of $500,000 and estimates annual direct labor
hours of 25,000. What is the predetermined overhead rate?
A) $20.00 per direct labor hour
B) $15.00 per direct labor hour
C) $25.00 per direct labor hour
D) $10.00 per direct labor hour
,Answer: A) $20.00 per direct labor hour
Rationale: Predetermined overhead rate = Estimated overhead ÷ Estimated activity = $500,000 ÷ 25,000
= $20.00 per direct labor hour.
Question 5
A job uses 120 direct labor hours. The predetermined overhead rate is $18 per direct labor hour. What is
the applied overhead for this job?
A) $1,800
B) $2,160
C) $2,400
D) $1,920
Answer: B) $2,160
Rationale: Applied overhead = Predetermined overhead rate × Actual activity = $18 × 120 = $2,160.
Question 6
What document is used to accumulate the costs of a specific job in a joborder costing system?
A) Materials requisition form
B) Job cost sheet
C) Time ticket
D) Production order
Answer: B) Job cost sheet
, Rationale: The job cost sheet is the primary document used to accumulate all costs (direct materials,
direct labor, and manufacturing overhead) for a specific job.
Question 7
When direct materials are issued to a job, which account is debited?
A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold
Answer: B) Work in Process Inventory
Rationale: When direct materials are used in production, the cost is transferred from Raw Materials
Inventory to Work in Process Inventory. The entry is: Debit Work in Process Inventory, Credit Raw
Materials Inventory.
Question 8
When manufacturing overhead is applied to a job, which account is credited?
A) Work in Process Inventory
B) Manufacturing Overhead
C) Finished Goods Inventory
D) Cost of Goods Sold
Answer: B) Manufacturing Overhead
