WGU D101 Cost and Managerial
Accounting Exam Study Questions
with Correct Answers
1. Which statement accurately describes the equivalent number of units?
a. The equivalent number of units is calculated by adding together the
physical goods placed in process during the current period with the
physical goods in ending inventory.
b. The equivalent number of units is calculated by adding together the
physical goods in beginning inventory to the physical goods placed in
process during the current period.
c. The equivalent number of units is always the same as the number of
physical units transferred to finished goods.
d. The equivalent number of units is not the same as the number of
physical units transferred to finished goods. - ANSWER d. The
equivalent number of units is a measure of work done on units and
almost always differs from the actual number of units. It is a number
used to calculate the cost per unit and not the transfer of actual units.
2. The excess of the sales price of one unit over its variable costs - ANSWER
Per-unit Contribution Margin
3. Costs associated with activities or facilities outside the factory - ANSWER
Period Costs
,4. A rate at which estimated manufacturing overhead costs are assigned to
products throughout the year; equals total estimated manufacturing overhead
costs divided by a suitable allocation base such as a number of units
produced. - ANSWER Predetermined Overhead Rate
5. A system of evaluating performance; managers are held accountable for the
costs, revenues, assets, or other elements over which they have control -
ANSWER Responsibility Accounting
6. A measure of operating performance; computed by dividing net income by
total sales revenue. Similar to profit margin - ANSWER Return On Sales
Revenue
7. A schedule of projected sales over the budget period, which often includes a
measure of revenue earned and cash collected from customers - ANSWER
Sales Budget
8. The relative proportion of total sales dollars (or total units sold) that is
represented by each of a company's products - ANSWER Sales Mix
9. A schedule of all nonproduction spending expected to occur during the
budget period - ANSWER Selling and Administrative Expense Budget
10.Any organization whose main economic activity involves producing a
nonphysical product that provides value to a customer - ANSWER Service
Organizations
,11.An order that may be priced below the normal selling price to utilize excess
capacity and thereby contribute to company profits - ANSWER Special
Order
12.A cost‑accumulation system in which standard costs are used as product
costs instead of actual costs. The standard costs are then adjusted to actual
costs when financial reports are created. This adjustment creates variances
that are reported to management - ANSWER Standard Cost System
13.A cost-accumulation system in which standard costs are used as product
costs instead of actual costs. The standard costs are then adjusted to actual
costs when financial reports are created. This adjustment creates variances
that are reported to management - ANSWER Standard Costing System
14.Amount of materials that should have been used to manufacture products in
a specific time period - ANSWER Standard Quantity Allowed
15.Manufacturing costs other than direct materials and direct labor - ANSWER
Actual Manufacturing Overhead
16.Inventory that is partly completed in the production process, but not yet
ready for sale to customers - ANSWER Work-in-process Inventory
17.Costs that remain constant in total, regardless of activity level, at least over a
certain range of activity - ANSWER Fixed Costs
18.The costs that are associated with units completed and transferred out this
period are the sum of which components?
, a. The cost of beginning work-in-process inventory, both materials and
conversion cost, and the cost per equivalent unit required to complete
those units in beginning inventory
b. The cost of beginning work-in-process inventory, both materials and
conversion costs; the cost per equivalent unit required to complete
those units in beginning inventory; and the cost per equivalent unit of
the items started and completed this period, both materials and
conversion costs
c. The cost per equivalent unit required to complete the units in
beginning inventory and the cost per equivalent unit of the items
started and completed this period, both materials and conversion
costs.
d. Only the cost per equivalent unit of the items started and completed
this period, both materials and conversion costs. - ANSWER b.
Correct! It is these three costs that make up the costs of the units
transferred out to finished goods.
19.Which statement accurately describes the cost of goods transferred out?
a. The cost of goods transferred out to finished goods is the sum of the
goods in only one process but not in all periods.
b. The cost of goods transferred out to finished goods is the sum of the
costs to make the finished goods in all processes, both in the current
or prior period.
Accounting Exam Study Questions
with Correct Answers
1. Which statement accurately describes the equivalent number of units?
a. The equivalent number of units is calculated by adding together the
physical goods placed in process during the current period with the
physical goods in ending inventory.
b. The equivalent number of units is calculated by adding together the
physical goods in beginning inventory to the physical goods placed in
process during the current period.
c. The equivalent number of units is always the same as the number of
physical units transferred to finished goods.
d. The equivalent number of units is not the same as the number of
physical units transferred to finished goods. - ANSWER d. The
equivalent number of units is a measure of work done on units and
almost always differs from the actual number of units. It is a number
used to calculate the cost per unit and not the transfer of actual units.
2. The excess of the sales price of one unit over its variable costs - ANSWER
Per-unit Contribution Margin
3. Costs associated with activities or facilities outside the factory - ANSWER
Period Costs
,4. A rate at which estimated manufacturing overhead costs are assigned to
products throughout the year; equals total estimated manufacturing overhead
costs divided by a suitable allocation base such as a number of units
produced. - ANSWER Predetermined Overhead Rate
5. A system of evaluating performance; managers are held accountable for the
costs, revenues, assets, or other elements over which they have control -
ANSWER Responsibility Accounting
6. A measure of operating performance; computed by dividing net income by
total sales revenue. Similar to profit margin - ANSWER Return On Sales
Revenue
7. A schedule of projected sales over the budget period, which often includes a
measure of revenue earned and cash collected from customers - ANSWER
Sales Budget
8. The relative proportion of total sales dollars (or total units sold) that is
represented by each of a company's products - ANSWER Sales Mix
9. A schedule of all nonproduction spending expected to occur during the
budget period - ANSWER Selling and Administrative Expense Budget
10.Any organization whose main economic activity involves producing a
nonphysical product that provides value to a customer - ANSWER Service
Organizations
,11.An order that may be priced below the normal selling price to utilize excess
capacity and thereby contribute to company profits - ANSWER Special
Order
12.A cost‑accumulation system in which standard costs are used as product
costs instead of actual costs. The standard costs are then adjusted to actual
costs when financial reports are created. This adjustment creates variances
that are reported to management - ANSWER Standard Cost System
13.A cost-accumulation system in which standard costs are used as product
costs instead of actual costs. The standard costs are then adjusted to actual
costs when financial reports are created. This adjustment creates variances
that are reported to management - ANSWER Standard Costing System
14.Amount of materials that should have been used to manufacture products in
a specific time period - ANSWER Standard Quantity Allowed
15.Manufacturing costs other than direct materials and direct labor - ANSWER
Actual Manufacturing Overhead
16.Inventory that is partly completed in the production process, but not yet
ready for sale to customers - ANSWER Work-in-process Inventory
17.Costs that remain constant in total, regardless of activity level, at least over a
certain range of activity - ANSWER Fixed Costs
18.The costs that are associated with units completed and transferred out this
period are the sum of which components?
, a. The cost of beginning work-in-process inventory, both materials and
conversion cost, and the cost per equivalent unit required to complete
those units in beginning inventory
b. The cost of beginning work-in-process inventory, both materials and
conversion costs; the cost per equivalent unit required to complete
those units in beginning inventory; and the cost per equivalent unit of
the items started and completed this period, both materials and
conversion costs
c. The cost per equivalent unit required to complete the units in
beginning inventory and the cost per equivalent unit of the items
started and completed this period, both materials and conversion
costs.
d. Only the cost per equivalent unit of the items started and completed
this period, both materials and conversion costs. - ANSWER b.
Correct! It is these three costs that make up the costs of the units
transferred out to finished goods.
19.Which statement accurately describes the cost of goods transferred out?
a. The cost of goods transferred out to finished goods is the sum of the
goods in only one process but not in all periods.
b. The cost of goods transferred out to finished goods is the sum of the
costs to make the finished goods in all processes, both in the current
or prior period.
