WGU C251 OBJECTIVE ASSESSMENT
ACTUAL EXAM PREP 2025/2026
COMPLETE QUESTIONS AND VERIFIED
CORRECT SOLUTIONS WITH RATIONALES
|| 100% GUARANTEED PASS
<LATEST VERSION>
1. Describe cost classifications. - ANSWER ✔ cost are classified differently
according to need/purpose
assigning costs to cost objects
manufacturing companies
for preparing financial statements
predicting cost behavior
making decisions
2. cost object - ANSWER ✔ anything for which cost data are desired
3. indirect costs - ANSWER ✔ cost that cannot be easily or conveniently
traced to a specific cost object; considered a conversion cost
4. common costs - ANSWER ✔ cost that is incurred to support a number of
cost objects but cannot be traced to the individually
5. direct costs - ANSWER ✔ cost that can be easily and conveniently traced to
a specific cost object
6. financial accounting - ANSWER ✔ concerned with reporting financial
information to external parties
7. managerial accounting - ANSWER ✔ concerned with providing information
to managers for use within the organization
,8. key difference b/t financial and managerial accounting - ANSWER ✔
financial: outside, past activities, objective, verifiable, precision,
GAAP/IFRS, external reports
managerial: inside, affect future decisions, relevant, timely, not mandatory,
need not follow GAAP, used for internal decision making
9. variable cost - ANSWER ✔ varies, in total, in direct proportion to changes
in level of activity (constant if "per unit")
10.cost structure - ANSWER ✔ the relative proportion of each type of cost
11.activity base - ANSWER ✔ measure of whatever causes the incurrence of a
variable cost (aka cost driver)
12.fixed cost - ANSWER ✔ cost that remains constant in total regardless of
changes in the level of activity
13.committed fixed costs - ANSWER ✔ represents organizational investments
with multiyear planning horizons that cannot be significantly reduced even
for short periods of time without making fundamental changes
14.discretionary fixed costs - ANSWER ✔ annual decisions by management to
spend on certain fixed costs items like advertising, research, public relations
15.linearity assumption - ANSWER ✔ relation b/t cost and activity can be
represented by a straight line
16.curvilinear - ANSWER ✔ relation b/t cost and activity is a curve
17.relevant range - ANSWER ✔ range of activity within which the assumption
that cost behavior is strictly linear is reasonably valid
18.the difference between a traditional income statement and a contribution
format statement - ANSWER ✔ traditional income statements are prepared
primarily for external purposes; does not distinguish b/t fixed and variable
costs
contribution format statement breaksdown variable and fixed costs
separately
, 19.contribution approach - ANSWER ✔ provides managers with an income
statement that distinguishes between fixed and variable costs
20.contribution margin - ANSWER ✔ amount remaining from sales revenue
after variable expenses have been deducted; COGS is considered variable
21.differential cost - ANSWER ✔ a difference in costs between any two
alternatives
22.differential revenue - ANSWER ✔ a difference in sales between two
alternatives
23.opportunity cost - ANSWER ✔ potential benefit that is given up when one
alternative is selected over another
24.sunk cost - ANSWER ✔ a cost that has already been incurred and that
cannot be changed by any decision now or in the future
25.cost of goods sold - ANSWER ✔ beginning inventory + purchases - ending
inventory
26.gross margin - ANSWER ✔ sales - COGS
27.net operating income - ANSWER ✔ gross margin - selling – admin
28.Which organizational structure groups employees by similar skills and
tasks?
A) Matrix
B) Divisional
C) Functional ✔
D) Network
Rationale: A functional structure groups people by specialty (e.g.,
marketing, finance).
29.A matrix structure is unique because it:
A) Eliminates reporting lines
ACTUAL EXAM PREP 2025/2026
COMPLETE QUESTIONS AND VERIFIED
CORRECT SOLUTIONS WITH RATIONALES
|| 100% GUARANTEED PASS
<LATEST VERSION>
1. Describe cost classifications. - ANSWER ✔ cost are classified differently
according to need/purpose
assigning costs to cost objects
manufacturing companies
for preparing financial statements
predicting cost behavior
making decisions
2. cost object - ANSWER ✔ anything for which cost data are desired
3. indirect costs - ANSWER ✔ cost that cannot be easily or conveniently
traced to a specific cost object; considered a conversion cost
4. common costs - ANSWER ✔ cost that is incurred to support a number of
cost objects but cannot be traced to the individually
5. direct costs - ANSWER ✔ cost that can be easily and conveniently traced to
a specific cost object
6. financial accounting - ANSWER ✔ concerned with reporting financial
information to external parties
7. managerial accounting - ANSWER ✔ concerned with providing information
to managers for use within the organization
,8. key difference b/t financial and managerial accounting - ANSWER ✔
financial: outside, past activities, objective, verifiable, precision,
GAAP/IFRS, external reports
managerial: inside, affect future decisions, relevant, timely, not mandatory,
need not follow GAAP, used for internal decision making
9. variable cost - ANSWER ✔ varies, in total, in direct proportion to changes
in level of activity (constant if "per unit")
10.cost structure - ANSWER ✔ the relative proportion of each type of cost
11.activity base - ANSWER ✔ measure of whatever causes the incurrence of a
variable cost (aka cost driver)
12.fixed cost - ANSWER ✔ cost that remains constant in total regardless of
changes in the level of activity
13.committed fixed costs - ANSWER ✔ represents organizational investments
with multiyear planning horizons that cannot be significantly reduced even
for short periods of time without making fundamental changes
14.discretionary fixed costs - ANSWER ✔ annual decisions by management to
spend on certain fixed costs items like advertising, research, public relations
15.linearity assumption - ANSWER ✔ relation b/t cost and activity can be
represented by a straight line
16.curvilinear - ANSWER ✔ relation b/t cost and activity is a curve
17.relevant range - ANSWER ✔ range of activity within which the assumption
that cost behavior is strictly linear is reasonably valid
18.the difference between a traditional income statement and a contribution
format statement - ANSWER ✔ traditional income statements are prepared
primarily for external purposes; does not distinguish b/t fixed and variable
costs
contribution format statement breaksdown variable and fixed costs
separately
, 19.contribution approach - ANSWER ✔ provides managers with an income
statement that distinguishes between fixed and variable costs
20.contribution margin - ANSWER ✔ amount remaining from sales revenue
after variable expenses have been deducted; COGS is considered variable
21.differential cost - ANSWER ✔ a difference in costs between any two
alternatives
22.differential revenue - ANSWER ✔ a difference in sales between two
alternatives
23.opportunity cost - ANSWER ✔ potential benefit that is given up when one
alternative is selected over another
24.sunk cost - ANSWER ✔ a cost that has already been incurred and that
cannot be changed by any decision now or in the future
25.cost of goods sold - ANSWER ✔ beginning inventory + purchases - ending
inventory
26.gross margin - ANSWER ✔ sales - COGS
27.net operating income - ANSWER ✔ gross margin - selling – admin
28.Which organizational structure groups employees by similar skills and
tasks?
A) Matrix
B) Divisional
C) Functional ✔
D) Network
Rationale: A functional structure groups people by specialty (e.g.,
marketing, finance).
29.A matrix structure is unique because it:
A) Eliminates reporting lines
