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WGU D101 Cost and Managerial Accounting
ACTUAL EXAM QUESTIONS AND ANSWERS
2026/2027 | Objective Assessment OA Simulation
| Aligned with Official Competency Weights | Pass
Guaranteed - A+ Graded
Exam Specifications:
Total Questions: 75
Time Limit: 3 hours (simulated)
Passing Score: Competency-based (approximately 70%)
Cognitive Levels: 10% Knowledge | 60% Application | 30% Analysis
DOMAIN 1: Cost Concepts, Behavior & Classification (15% | ~11 Questions)
Q1: Cost Classification - Manufacturing vs. Period Costs
Which of the following is classified as a product cost for a manufacturing company?
A. Advertising expenses for a new product launch
B. Salaries of the sales management team
C. Wages of assembly line workers [CORRECT]
D. Depreciation on corporate headquarters building
Correct Answer: C
Rationale: Product costs (inventoriable costs) are costs directly associated with manufacturing
products and include:
Direct Materials (DM): Raw materials that become part of the product
Direct Labor (DL): Wages of workers who touch the product (assembly line workers)
Manufacturing Overhead (MOH): Indirect manufacturing costs
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Period costs are non-manufacturing costs expensed in the period incurred:
Selling expenses (advertising, sales salaries)
Administrative expenses (corporate overhead, office depreciation)
Distractor Analysis:
A: Advertising is a selling expense (period cost), not related to production.
B: Sales management salaries are selling expenses (period cost).
C: CORRECT - Assembly line wages are direct labor, a core product cost.
D: Corporate HQ depreciation is an administrative expense (period cost), not manufacturing
overhead.
Q2: High-Low Method - Variable Cost Calculation
A company's utility costs at various production levels are:
Table
Copy
Month Units Produced Total Utility Cost
January 8,000 $14,000
February 12,000 $18,000
March 10,000 $16,000
April 15,000 $21,000
Using the high-low method, what is the variable cost per unit?
A. $1.20
B. $1.40 [CORRECT]
C. $1.60
D. $1.75
Correct Answer: B
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Rationale:
Step 1: Identify high and low ACTIVITY points (not cost).
High activity: April: 15,000 units, $21,000
Low activity: January: 8,000 units, $14,000
Step 2: Calculate variable cost per unit.
Variable Cost per Unit=Change in ActivityChange in Cost=15,000−8,000$21,000−$14,000
=7,000$7,000=$1.40 per unit
Step 3: Calculate fixed cost (for verification). Using low point: $14,000 = \text{Fixed Cost} +
($1.40 \times 8,000)$ Fixed Cost = $14,000 - $11,200 = $2,800
Distractor Analysis:
A ($1.20): Results from using March (10,000, $16,000) and April (15,000, $21,000): ($21,000-
$16,000)/(15,000-10,000) = $5,000/5,000 = $1.00, or calculation error using wrong months.
B ($1.40): CORRECT - Proper high-low method application.
C ($1.60): Results from using high cost ($21,000) and low units (8,000) incorrectly: ($21,000-
$14,000)/(12,000-8,000) using February data incorrectly.
D ($1.75): Results from reversing numerator and denominator: 7,000/$7,000 = $1 inverted, or
using ($21,000/15,000) - ($14,000/8,000) = $1.40 - $1.75 = incorrect approach.
Q3: Contribution Margin vs. Traditional Income Statement
A company reports the following for the month:
Sales: $500,000
Cost of goods sold: $300,000 (includes $80,000 fixed manufacturing overhead)
Variable selling expenses: $40,000
Fixed selling expenses: $60,000
Variable administrative expenses: $20,000
Fixed administrative expenses: $30,000
What is the company's contribution margin?
A. $100,000
B. $140,000 [CORRECT]
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C. $160,000
D. $200,000
Correct Answer: B
Rationale:
Contribution Margin = Sales - All Variable Costs
Step 1: Identify all variable costs.
Variable COGS = Total COGS - Fixed MOH in COGS = $300,000 - $80,000 = $220,000
Variable selling expenses = $40,000
Variable administrative expenses = $20,000
Total Variable Costs = $220,000 + $40,000 + $20,000 = $280,000
Step 2: Calculate contribution margin. Contribution Margin=$500,000−$280,000=$140,000
Alternative calculation using variable costing: Contribution Margin = Sales - Variable
Manufacturing Costs - Variable S&A Expenses = $500,000 - $220,000 - $40,000 - $20,000 =
$140,000
Distractor Analysis:
A ($100,000): Results from subtracting ALL COGS ($300,000) + variable S&A ($60,000) =
$360,000; $500,000 - $360,000 = $140,000? No. Actually: $500,000 - $300,000 - $40,000 -
$20,000 = $140,000. This is wrong. May result from $500,000 - $300,000 - $100,000 (some
fixed costs) = $100,000.
B ($140,000): CORRECT - Properly segregates variable vs. fixed costs.
C ($160,000): Results from using traditional gross margin ($200,000) and subtracting only
variable S&A ($60,000): $200,000 - $40,000 = $160,000 (forgetting variable admin).
D ($200,000): This is Gross Margin ($500,000 - $300,000), not contribution margin. Confuses
gross margin with contribution margin.
Q4: Mixed Cost Analysis - Regression Interpretation
A cost analyst runs a regression analysis for maintenance costs with machine hours as the
independent variable. The output shows:
Intercept: $12,000
X Variable (machine hours) coefficient: $4.50
WGU D101 Cost and Managerial Accounting
ACTUAL EXAM QUESTIONS AND ANSWERS
2026/2027 | Objective Assessment OA Simulation
| Aligned with Official Competency Weights | Pass
Guaranteed - A+ Graded
Exam Specifications:
Total Questions: 75
Time Limit: 3 hours (simulated)
Passing Score: Competency-based (approximately 70%)
Cognitive Levels: 10% Knowledge | 60% Application | 30% Analysis
DOMAIN 1: Cost Concepts, Behavior & Classification (15% | ~11 Questions)
Q1: Cost Classification - Manufacturing vs. Period Costs
Which of the following is classified as a product cost for a manufacturing company?
A. Advertising expenses for a new product launch
B. Salaries of the sales management team
C. Wages of assembly line workers [CORRECT]
D. Depreciation on corporate headquarters building
Correct Answer: C
Rationale: Product costs (inventoriable costs) are costs directly associated with manufacturing
products and include:
Direct Materials (DM): Raw materials that become part of the product
Direct Labor (DL): Wages of workers who touch the product (assembly line workers)
Manufacturing Overhead (MOH): Indirect manufacturing costs
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Period costs are non-manufacturing costs expensed in the period incurred:
Selling expenses (advertising, sales salaries)
Administrative expenses (corporate overhead, office depreciation)
Distractor Analysis:
A: Advertising is a selling expense (period cost), not related to production.
B: Sales management salaries are selling expenses (period cost).
C: CORRECT - Assembly line wages are direct labor, a core product cost.
D: Corporate HQ depreciation is an administrative expense (period cost), not manufacturing
overhead.
Q2: High-Low Method - Variable Cost Calculation
A company's utility costs at various production levels are:
Table
Copy
Month Units Produced Total Utility Cost
January 8,000 $14,000
February 12,000 $18,000
March 10,000 $16,000
April 15,000 $21,000
Using the high-low method, what is the variable cost per unit?
A. $1.20
B. $1.40 [CORRECT]
C. $1.60
D. $1.75
Correct Answer: B
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Rationale:
Step 1: Identify high and low ACTIVITY points (not cost).
High activity: April: 15,000 units, $21,000
Low activity: January: 8,000 units, $14,000
Step 2: Calculate variable cost per unit.
Variable Cost per Unit=Change in ActivityChange in Cost=15,000−8,000$21,000−$14,000
=7,000$7,000=$1.40 per unit
Step 3: Calculate fixed cost (for verification). Using low point: $14,000 = \text{Fixed Cost} +
($1.40 \times 8,000)$ Fixed Cost = $14,000 - $11,200 = $2,800
Distractor Analysis:
A ($1.20): Results from using March (10,000, $16,000) and April (15,000, $21,000): ($21,000-
$16,000)/(15,000-10,000) = $5,000/5,000 = $1.00, or calculation error using wrong months.
B ($1.40): CORRECT - Proper high-low method application.
C ($1.60): Results from using high cost ($21,000) and low units (8,000) incorrectly: ($21,000-
$14,000)/(12,000-8,000) using February data incorrectly.
D ($1.75): Results from reversing numerator and denominator: 7,000/$7,000 = $1 inverted, or
using ($21,000/15,000) - ($14,000/8,000) = $1.40 - $1.75 = incorrect approach.
Q3: Contribution Margin vs. Traditional Income Statement
A company reports the following for the month:
Sales: $500,000
Cost of goods sold: $300,000 (includes $80,000 fixed manufacturing overhead)
Variable selling expenses: $40,000
Fixed selling expenses: $60,000
Variable administrative expenses: $20,000
Fixed administrative expenses: $30,000
What is the company's contribution margin?
A. $100,000
B. $140,000 [CORRECT]
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C. $160,000
D. $200,000
Correct Answer: B
Rationale:
Contribution Margin = Sales - All Variable Costs
Step 1: Identify all variable costs.
Variable COGS = Total COGS - Fixed MOH in COGS = $300,000 - $80,000 = $220,000
Variable selling expenses = $40,000
Variable administrative expenses = $20,000
Total Variable Costs = $220,000 + $40,000 + $20,000 = $280,000
Step 2: Calculate contribution margin. Contribution Margin=$500,000−$280,000=$140,000
Alternative calculation using variable costing: Contribution Margin = Sales - Variable
Manufacturing Costs - Variable S&A Expenses = $500,000 - $220,000 - $40,000 - $20,000 =
$140,000
Distractor Analysis:
A ($100,000): Results from subtracting ALL COGS ($300,000) + variable S&A ($60,000) =
$360,000; $500,000 - $360,000 = $140,000? No. Actually: $500,000 - $300,000 - $40,000 -
$20,000 = $140,000. This is wrong. May result from $500,000 - $300,000 - $100,000 (some
fixed costs) = $100,000.
B ($140,000): CORRECT - Properly segregates variable vs. fixed costs.
C ($160,000): Results from using traditional gross margin ($200,000) and subtracting only
variable S&A ($60,000): $200,000 - $40,000 = $160,000 (forgetting variable admin).
D ($200,000): This is Gross Margin ($500,000 - $300,000), not contribution margin. Confuses
gross margin with contribution margin.
Q4: Mixed Cost Analysis - Regression Interpretation
A cost analyst runs a regression analysis for maintenance costs with machine hours as the
independent variable. The output shows:
Intercept: $12,000
X Variable (machine hours) coefficient: $4.50
