WGU D196, Questions with Correct Answers (Grade A+)
Question 1:
1. Which budget should include all production costs other than those for direct materials and direct labor?
A.Sales budget B.Direct materials budget C.Manufacturing overhead budget
D. Production budget
Answer: c
Question 2:
2. Which account is a common asset account? A.Accounts payables B.Equity C.Accounts receivable
D. Utilities Expense
Answer: c
Question 3: 3 .On which financial statement would you see the valuation of a company's asset accounts?
a.Statement of Cash Flows b.Balance Sheet c.Income Statement d.Statement of Retained Earnings
Answer: B
Question 4:
4. What is the final step in the accounting cycle? a.Summarize the effects of transactions b.Analyze
transactions c.Prepare reports d.Record the effects of transactions
Answer: c
Question 5:
5. Which of the following is not an example of a transaction? a.Receive cash in payment of an invoice
b.Purchase an asset from a supplier c.Sale on credit to a customer
d. Preparing financial statements
Answer: D. Preparing financial statements
Question 6:
6. On which financial statement would you see cash flows from financing activities? a.Statement of Cash Flows
b.Balance Sheet c.Income Statement d.Statement of Retained Earnings
Answer: d
Question 7:
7. Whose job is it to make sure that investors are provided with full and fair information about publicly traded
companies? FASB AICPA IASB SEC
Answer: d
Page 1
,Question 8:
8. How does a classified balance sheet provide useful information to a decision maker? a.It distinguishes
between current and long-term assets b.It provides data that are not publicly disclosed c.It distinguishes
liabilities from expenses
D. It provides data for a period of time instead of as a point in time
Answer: a
Question 9:
9. In some companies, the performance measures for profit center managers are heavily influenced by cost
allocations downward from organizational units (such as company headquarters). Why is this a mistake?
a.Controllable costs should not be included in the performance evaluation measure of a profit center manager
b.Revenues should not be included in the performance evaluation measure of a profit center manager
c.Uncontrollable costs should not be included in the performance evaluation measure of a profit center manager
d. Direct costs should not be included in the performance evaluation measure of a profit center manager
Answer: c
Question 10:
10. Which is an example of a product cost? a.Non-manufacturing personnel costs b.Rent Expense c.Office
Supplies
d. Raw materials to make a product
Answer: D. Raw materials to make a product
Question 11:
11. Which label is given to the cost of wages for factory supervisors?
a. Direct labor b.Direct materials
c. Manufacturing overhead
d. Administrative expenses
Answer: C. Manufacturing overhead
Question 12:
12. A company reports the following data: Price per unit = $20 Variable costs per unit = $12 Fixed costs =
$12,000 Given these data, what is the variable cost ratio?
a. 40%
b. 25%
c. 16%
d. 60%
Answer: D. 60%
Page 2
, Question 13:
13. If overhead is underapplied, which statement is true? a.Actual costs exceed applied costs b.Applied costs
exceed actual costs c.Costs will not be affected
d. Budgeted and applied costs will be equal
Answer: a
Question 14:
14. Which of the following is not an example of a cost driver? a.Miles driven b.Selling costs c.Machine hours
d. Number of customers
Answer: b
Question 15:
15. Which item is a period cost? Manufacturing supplies Overhead directly tied to the production facility Raw
materials Marketing expense
Answer: d
Question 16:
16. Which overhead allocation method should be used for a trash bag manufacturer?
a. Product-line costing
b. Process costing
c. ABC costing d . Job order costing
Answer: B. Process costing
Question 17:
17. For relevant range, which costs are approximately linear within a certain range of production?
a. Fixed costs
b. Variable costs
c. Stepped costs
d. Mixed costs
Answer: B. Variable costs
Question 18:
18. Which of the following focuses on how a company's activity levels impact profits? Job order costing
Cost-Volume-Profit Analysis Overhead cost allocation Process costing
Answer: b
Page 3
Question 1:
1. Which budget should include all production costs other than those for direct materials and direct labor?
A.Sales budget B.Direct materials budget C.Manufacturing overhead budget
D. Production budget
Answer: c
Question 2:
2. Which account is a common asset account? A.Accounts payables B.Equity C.Accounts receivable
D. Utilities Expense
Answer: c
Question 3: 3 .On which financial statement would you see the valuation of a company's asset accounts?
a.Statement of Cash Flows b.Balance Sheet c.Income Statement d.Statement of Retained Earnings
Answer: B
Question 4:
4. What is the final step in the accounting cycle? a.Summarize the effects of transactions b.Analyze
transactions c.Prepare reports d.Record the effects of transactions
Answer: c
Question 5:
5. Which of the following is not an example of a transaction? a.Receive cash in payment of an invoice
b.Purchase an asset from a supplier c.Sale on credit to a customer
d. Preparing financial statements
Answer: D. Preparing financial statements
Question 6:
6. On which financial statement would you see cash flows from financing activities? a.Statement of Cash Flows
b.Balance Sheet c.Income Statement d.Statement of Retained Earnings
Answer: d
Question 7:
7. Whose job is it to make sure that investors are provided with full and fair information about publicly traded
companies? FASB AICPA IASB SEC
Answer: d
Page 1
,Question 8:
8. How does a classified balance sheet provide useful information to a decision maker? a.It distinguishes
between current and long-term assets b.It provides data that are not publicly disclosed c.It distinguishes
liabilities from expenses
D. It provides data for a period of time instead of as a point in time
Answer: a
Question 9:
9. In some companies, the performance measures for profit center managers are heavily influenced by cost
allocations downward from organizational units (such as company headquarters). Why is this a mistake?
a.Controllable costs should not be included in the performance evaluation measure of a profit center manager
b.Revenues should not be included in the performance evaluation measure of a profit center manager
c.Uncontrollable costs should not be included in the performance evaluation measure of a profit center manager
d. Direct costs should not be included in the performance evaluation measure of a profit center manager
Answer: c
Question 10:
10. Which is an example of a product cost? a.Non-manufacturing personnel costs b.Rent Expense c.Office
Supplies
d. Raw materials to make a product
Answer: D. Raw materials to make a product
Question 11:
11. Which label is given to the cost of wages for factory supervisors?
a. Direct labor b.Direct materials
c. Manufacturing overhead
d. Administrative expenses
Answer: C. Manufacturing overhead
Question 12:
12. A company reports the following data: Price per unit = $20 Variable costs per unit = $12 Fixed costs =
$12,000 Given these data, what is the variable cost ratio?
a. 40%
b. 25%
c. 16%
d. 60%
Answer: D. 60%
Page 2
, Question 13:
13. If overhead is underapplied, which statement is true? a.Actual costs exceed applied costs b.Applied costs
exceed actual costs c.Costs will not be affected
d. Budgeted and applied costs will be equal
Answer: a
Question 14:
14. Which of the following is not an example of a cost driver? a.Miles driven b.Selling costs c.Machine hours
d. Number of customers
Answer: b
Question 15:
15. Which item is a period cost? Manufacturing supplies Overhead directly tied to the production facility Raw
materials Marketing expense
Answer: d
Question 16:
16. Which overhead allocation method should be used for a trash bag manufacturer?
a. Product-line costing
b. Process costing
c. ABC costing d . Job order costing
Answer: B. Process costing
Question 17:
17. For relevant range, which costs are approximately linear within a certain range of production?
a. Fixed costs
b. Variable costs
c. Stepped costs
d. Mixed costs
Answer: B. Variable costs
Question 18:
18. Which of the following focuses on how a company's activity levels impact profits? Job order costing
Cost-Volume-Profit Analysis Overhead cost allocation Process costing
Answer: b
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