WGU | D101
OBJECTIVE ASSESSMENT - EXAM
WGU D101 Cost and Managerial
Accounting |OA| Objective
Assessment | 161 Actual
Questions and Answers (Verified
Answers), 100% Guaranteed Pass
|| Complete A+ Guide
Cost and Managerial Accounting | Objective Assessment
161 100% 2026/2027
QUESTIONS VERIFIED ANSWERS EDITION
TOPICS COVERED
• Product vs Period Costs • Overhead Application and Variance
• Direct vs Indirect Cost Allocation • Break-Even and Target Profit Analysis
• Variable and Fixed Cost Behavior • Differential and Opportunity Costs
COVER PAGE - 1
, SECTION 1 | Cost Concepts and Classifications | Q1-Q33 | WGU D101 Cost and Managerial Accounting |OA
Q1 Question 1 of 161
A manufacturing company incurred $45,000 in raw materials costs. Of this amount, $32,000
was for direct materials and $13,000 was for indirect materials. How should the $13,000 be
classified?
A. Product cost, direct material
B. Product cost, manufacturing overhead
C. Period cost, selling expense
D. Period cost, administrative expense
Correct Answer: B
Rationale:
Indirect materials are part of manufacturing overhead, which is a product cost because it is necessary to produce the
finished goods. Direct materials are traced directly to products, while indirect materials cannot be traced conveniently
and are therefore allocated as overhead.
Q2 Question 2 of 161
A furniture maker pays $18,000 monthly to lease its factory building. During a month when
production drops by 30%, which statement about this cost is most accurate?
A. The total cost decreases proportionally with production volume
B. The cost per unit increases as fewer units are produced
C. The cost becomes a variable cost at lower volumes
D. The cost should be reclassified as a period cost
Correct Answer: B
Rationale:
Factory lease is a fixed cost, so total cost remains $18,000 regardless of volume. With fewer units produced, the fixed
cost per unit rises because the same total is spread over fewer units. It does not become variable or a period cost.
WGU D101 Cost and Managerial Accounting |OA| Objective Assessment | 161 Actual Questions and Answers Page 2 of TBD
, Q3 Question 3 of 161
A company produces custom-designed sailboats. The cost of the marine-grade mahogany
used for each boat's hull is best described as which type of cost?
A. Indirect material, product cost
B. Direct material, product cost
C. Direct material, period cost
D. Variable manufacturing overhead
Correct Answer: B
Rationale:
Mahogany for hulls is a direct material because it is physically traceable to each specific sailboat and is a major
component. All manufacturing costs, including direct materials, are product costs that attach to inventory until sold.
Q4 Question 4 of 161
A pharmaceutical company spends $2.4 million on television advertising for a new allergy
medication. Under standard cost classification, this expenditure should be recorded as what?
A. Product cost, inventoried until sale
B. Period cost, expensed in the current period
C. Manufacturing overhead, allocated to units
D. Direct cost, traced to each pill bottle
Correct Answer: B
Rationale:
Advertising is a selling expense, which is a period cost. Period costs are expensed immediately rather than being
attached to inventory. It is not a manufacturing cost and cannot be traced to individual units.
WGU D101 Cost and Managerial Accounting |OA| Objective Assessment | 161 Actual Questions and Answers Page 3 of TBD
, Q5 Question 5 of 161
A bakery's electric bill includes $800 for ovens and mixers and $300 for office lighting and
computers. How should the $800 be classified?
A. Period cost, utilities expense
B. Product cost, manufacturing overhead
C. Direct cost, traced to each pastry
D. Variable selling expense
Correct Answer: B
Rationale:
Electricity for production equipment is manufacturing overhead because it supports the factory but cannot be traced
directly to individual products. It is a product cost that becomes part of inventory valuation.
Q6 Question 6 of 161
A car manufacturer pays assembly line workers $28 per hour. During a month with no
production due to supply chain issues, the workers are still paid for 40 hours weekly. How
should their wages be classified during the idle period?
A. Period cost, administrative expense
B. Product cost, direct labor
C. Product cost, manufacturing overhead
D. Variable cost, selling expense
Correct Answer: C
Rationale:
When workers are idle due to lack of production, their wages become indirect labor and are classified as manufacturing
overhead rather than direct labor. Direct labor applies only to time spent actively working on products.
WGU D101 Cost and Managerial Accounting |OA| Objective Assessment | 161 Actual Questions and Answers Page 4 of TBD
OBJECTIVE ASSESSMENT - EXAM
WGU D101 Cost and Managerial
Accounting |OA| Objective
Assessment | 161 Actual
Questions and Answers (Verified
Answers), 100% Guaranteed Pass
|| Complete A+ Guide
Cost and Managerial Accounting | Objective Assessment
161 100% 2026/2027
QUESTIONS VERIFIED ANSWERS EDITION
TOPICS COVERED
• Product vs Period Costs • Overhead Application and Variance
• Direct vs Indirect Cost Allocation • Break-Even and Target Profit Analysis
• Variable and Fixed Cost Behavior • Differential and Opportunity Costs
COVER PAGE - 1
, SECTION 1 | Cost Concepts and Classifications | Q1-Q33 | WGU D101 Cost and Managerial Accounting |OA
Q1 Question 1 of 161
A manufacturing company incurred $45,000 in raw materials costs. Of this amount, $32,000
was for direct materials and $13,000 was for indirect materials. How should the $13,000 be
classified?
A. Product cost, direct material
B. Product cost, manufacturing overhead
C. Period cost, selling expense
D. Period cost, administrative expense
Correct Answer: B
Rationale:
Indirect materials are part of manufacturing overhead, which is a product cost because it is necessary to produce the
finished goods. Direct materials are traced directly to products, while indirect materials cannot be traced conveniently
and are therefore allocated as overhead.
Q2 Question 2 of 161
A furniture maker pays $18,000 monthly to lease its factory building. During a month when
production drops by 30%, which statement about this cost is most accurate?
A. The total cost decreases proportionally with production volume
B. The cost per unit increases as fewer units are produced
C. The cost becomes a variable cost at lower volumes
D. The cost should be reclassified as a period cost
Correct Answer: B
Rationale:
Factory lease is a fixed cost, so total cost remains $18,000 regardless of volume. With fewer units produced, the fixed
cost per unit rises because the same total is spread over fewer units. It does not become variable or a period cost.
WGU D101 Cost and Managerial Accounting |OA| Objective Assessment | 161 Actual Questions and Answers Page 2 of TBD
, Q3 Question 3 of 161
A company produces custom-designed sailboats. The cost of the marine-grade mahogany
used for each boat's hull is best described as which type of cost?
A. Indirect material, product cost
B. Direct material, product cost
C. Direct material, period cost
D. Variable manufacturing overhead
Correct Answer: B
Rationale:
Mahogany for hulls is a direct material because it is physically traceable to each specific sailboat and is a major
component. All manufacturing costs, including direct materials, are product costs that attach to inventory until sold.
Q4 Question 4 of 161
A pharmaceutical company spends $2.4 million on television advertising for a new allergy
medication. Under standard cost classification, this expenditure should be recorded as what?
A. Product cost, inventoried until sale
B. Period cost, expensed in the current period
C. Manufacturing overhead, allocated to units
D. Direct cost, traced to each pill bottle
Correct Answer: B
Rationale:
Advertising is a selling expense, which is a period cost. Period costs are expensed immediately rather than being
attached to inventory. It is not a manufacturing cost and cannot be traced to individual units.
WGU D101 Cost and Managerial Accounting |OA| Objective Assessment | 161 Actual Questions and Answers Page 3 of TBD
, Q5 Question 5 of 161
A bakery's electric bill includes $800 for ovens and mixers and $300 for office lighting and
computers. How should the $800 be classified?
A. Period cost, utilities expense
B. Product cost, manufacturing overhead
C. Direct cost, traced to each pastry
D. Variable selling expense
Correct Answer: B
Rationale:
Electricity for production equipment is manufacturing overhead because it supports the factory but cannot be traced
directly to individual products. It is a product cost that becomes part of inventory valuation.
Q6 Question 6 of 161
A car manufacturer pays assembly line workers $28 per hour. During a month with no
production due to supply chain issues, the workers are still paid for 40 hours weekly. How
should their wages be classified during the idle period?
A. Period cost, administrative expense
B. Product cost, direct labor
C. Product cost, manufacturing overhead
D. Variable cost, selling expense
Correct Answer: C
Rationale:
When workers are idle due to lack of production, their wages become indirect labor and are classified as manufacturing
overhead rather than direct labor. Direct labor applies only to time spent actively working on products.
WGU D101 Cost and Managerial Accounting |OA| Objective Assessment | 161 Actual Questions and Answers Page 4 of TBD
