WGU C213 Exam Guide | Accounting for
Decision Makers | Latest 2026/2027 Q&A
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A|| BRAND NEW!!!
1.
Q: Fixed costs are best described as costs that:
A) change in total in proportion to activity
B) remain constant in total over relevant ranges
C) change per unit as activity changes
D) are always direct costs
A: B
Rationale: Fixed costs remain the same in total over the relevant range, even though per-unit
cost changes with activity.
2.
Q: Variable costs:
A) do not change
B) change per unit
C) change in total with activity
D) are always fixed per unit
A: C
Rationale: Variable costs change in total as activity changes; per unit variable cost remains
constant.
3.
Q: Depreciation on factory equipment is an example of:
A) Variable cost
B) Fixed cost
C) Mixed cost
D) Direct cost
A: B
Rationale: Depreciation does not vary with production volume — it’s fixed over the period.
,4.
Q: A mixed cost contains:
A) Only fixed elements
B) Only variable elements
C) Both fixed and variable elements
D) Only direct costs
A: C
Rationale: Mixed (semi-variable) costs contain both a fixed component and a variable
component (e.g., utility bills with base fee plus usage).
5.
Q: The relevant range refers to:
A) All possible activity levels
B) The normal operating level where cost assumptions are valid
C) Maximum production capacity
D) Break-even level only
A: B
Rationale: The relevant range is the span of activity within which cost behavior assumptions
(fixed vs. variable) remain valid.
6.
Q: If total fixed costs are $50,000 and production increases from 5,000 units to 10,000 units, the
fixed cost per unit will:
A) Increase
B) Decrease
C) Stay the same
D) Double
A: B
Rationale: Total fixed cost stays constant, but spreading it over more units lowers the fixed cost
per unit.
7.
Q: Which of the following is most likely a variable cost?
A) Factory rent
B) Insurance premium
C) Direct labor (paid per unit produced)
,D) Property taxes
A: C
Rationale: Direct labor paid per unit varies directly with production level, making it a variable
cost.
8.
Q: An example of an indirect cost is:
A) Wood used in furniture production
B) Wages of assembly line workers
C) Salary of factory supervisor
D) Commission paid per sale
A: C
Rationale: A factory supervisor’s salary cannot be traced directly to a specific unit, making it an
indirect cost (overhead).
9.
Q: Step costs:
A) Change continuously with activity
B) Remain fixed over small ranges and jump at certain levels
C) Are always variable
D) Are always direct costs
A: B
Rationale: Step costs remain fixed within a narrow activity band but increase when activity
surpasses a threshold (e.g., hiring an additional supervisor).
10.
Q: If total variable costs are $8 per unit and 2,000 units are produced, total variable cost equals:
A) $8
B) $2,000
C) $10,000
D) $16,000
A: D
Rationale: Total variable cost = Variable cost per unit × Units produced = $8 × 2,000 = $16,000.
11.
, Q: In CVP analysis, contribution margin equals:
A) Sales – Fixed costs
B) Sales – Variable costs
C) Net income – Fixed costs
D) Gross margin – Operating expenses
A: B
Rationale: Contribution margin shows how much revenue is available after variable costs to
cover fixed costs and profit.
12.
Q: If selling price is $50, variable cost is $30 and fixed cost is $40,000, the break-even sales
volume (units) is:
A) 2,000
B) 4,000
C) 1,000
D) 5,000
A: A
Rationale: Break-even = Fixed Costs ÷ (Selling − Variable) = 40,000 ÷ 20 = 2,000 units.
13.
Q: The contribution margin ratio is calculated as:
A) Contribution margin ÷ Net income
B) Fixed costs ÷ Sales
C) Contribution margin ÷ Sales
D) Sales ÷ Variable costs
A: C
Rationale: The contribution margin ratio shows the percentage of each sales dollar available to
cover fixed costs and profit.
14.
Q: If sales are $200,000 and variable costs are $120,000, the contribution margin ratio is:
A) 40%
B) 60%
C) 80%
D) 20%
A: A
Rationale: Contribution margin = 200,000 − 120,000 = 80,000.
CM ratio = 80,000 ÷ 200,000 = 40%.
Decision Makers | Latest 2026/2027 Q&A
PLUS RATIONALES | 100% Correct Grade
A|| BRAND NEW!!!
1.
Q: Fixed costs are best described as costs that:
A) change in total in proportion to activity
B) remain constant in total over relevant ranges
C) change per unit as activity changes
D) are always direct costs
A: B
Rationale: Fixed costs remain the same in total over the relevant range, even though per-unit
cost changes with activity.
2.
Q: Variable costs:
A) do not change
B) change per unit
C) change in total with activity
D) are always fixed per unit
A: C
Rationale: Variable costs change in total as activity changes; per unit variable cost remains
constant.
3.
Q: Depreciation on factory equipment is an example of:
A) Variable cost
B) Fixed cost
C) Mixed cost
D) Direct cost
A: B
Rationale: Depreciation does not vary with production volume — it’s fixed over the period.
,4.
Q: A mixed cost contains:
A) Only fixed elements
B) Only variable elements
C) Both fixed and variable elements
D) Only direct costs
A: C
Rationale: Mixed (semi-variable) costs contain both a fixed component and a variable
component (e.g., utility bills with base fee plus usage).
5.
Q: The relevant range refers to:
A) All possible activity levels
B) The normal operating level where cost assumptions are valid
C) Maximum production capacity
D) Break-even level only
A: B
Rationale: The relevant range is the span of activity within which cost behavior assumptions
(fixed vs. variable) remain valid.
6.
Q: If total fixed costs are $50,000 and production increases from 5,000 units to 10,000 units, the
fixed cost per unit will:
A) Increase
B) Decrease
C) Stay the same
D) Double
A: B
Rationale: Total fixed cost stays constant, but spreading it over more units lowers the fixed cost
per unit.
7.
Q: Which of the following is most likely a variable cost?
A) Factory rent
B) Insurance premium
C) Direct labor (paid per unit produced)
,D) Property taxes
A: C
Rationale: Direct labor paid per unit varies directly with production level, making it a variable
cost.
8.
Q: An example of an indirect cost is:
A) Wood used in furniture production
B) Wages of assembly line workers
C) Salary of factory supervisor
D) Commission paid per sale
A: C
Rationale: A factory supervisor’s salary cannot be traced directly to a specific unit, making it an
indirect cost (overhead).
9.
Q: Step costs:
A) Change continuously with activity
B) Remain fixed over small ranges and jump at certain levels
C) Are always variable
D) Are always direct costs
A: B
Rationale: Step costs remain fixed within a narrow activity band but increase when activity
surpasses a threshold (e.g., hiring an additional supervisor).
10.
Q: If total variable costs are $8 per unit and 2,000 units are produced, total variable cost equals:
A) $8
B) $2,000
C) $10,000
D) $16,000
A: D
Rationale: Total variable cost = Variable cost per unit × Units produced = $8 × 2,000 = $16,000.
11.
, Q: In CVP analysis, contribution margin equals:
A) Sales – Fixed costs
B) Sales – Variable costs
C) Net income – Fixed costs
D) Gross margin – Operating expenses
A: B
Rationale: Contribution margin shows how much revenue is available after variable costs to
cover fixed costs and profit.
12.
Q: If selling price is $50, variable cost is $30 and fixed cost is $40,000, the break-even sales
volume (units) is:
A) 2,000
B) 4,000
C) 1,000
D) 5,000
A: A
Rationale: Break-even = Fixed Costs ÷ (Selling − Variable) = 40,000 ÷ 20 = 2,000 units.
13.
Q: The contribution margin ratio is calculated as:
A) Contribution margin ÷ Net income
B) Fixed costs ÷ Sales
C) Contribution margin ÷ Sales
D) Sales ÷ Variable costs
A: C
Rationale: The contribution margin ratio shows the percentage of each sales dollar available to
cover fixed costs and profit.
14.
Q: If sales are $200,000 and variable costs are $120,000, the contribution margin ratio is:
A) 40%
B) 60%
C) 80%
D) 20%
A: A
Rationale: Contribution margin = 200,000 − 120,000 = 80,000.
CM ratio = 80,000 ÷ 200,000 = 40%.
