WGU D101 PRACTICE EXAMINATION 2026
QUESTIONS WITH ANSWERS GRADED A+
◍ Pre-determined Overhead Rate.
Answer: (All indirect)+DM+DL+Factory Cost+Dep exp÷ Labor Hours
◍ A company's actual manufacturing overhead was $156,000, and applied
manufacturing overhead was $172,000.What should be included in the
journal entry necessary to close the manufacturing overhead account?.
Answer: a. Debit to manufacturing overhead for $16,000.b. Debit to cost of
goods sold for $16,000.c. Debit to cost of goods sold for $156,000.d. Debit
to manufacturing overhead for $156,000.Correct is AApplied MOH was
$172,000Actual MOH was $156,000The difference is $16,000
(over-applied/credit balance)Debit to MOH and Credit to credit to COGS
◍ What is true about debits in the work-in-process T-account during the
period?.
Answer: a. They are costs put into production during the period.b. They are
direct material costs incurred only during the period.c. They are costs of
goods manufactured during the period.d. They are direct labor costs incurred
only during the period.Correct is AWIP will be debited to add cost to
production. MOH will be credited to move applied overhead out of MOH
into WIP
◍ Materials Quantity Variance Formula.
Answer: (SQ - AQ) x SP = Material Qty Variance(Standard Qty - Actual
Qty) x Standard Price = Material Qty Variance
◍ Material Price Variance Formula.
Answer: (SP - AP) x AQ = Material Price Variance(Standard Price - Actual
Price) x Actual Qty = Material Price Variance
◍ How are the costs belonging to a cost pool identified in an activity-based
, costing (ABC) system?.
Answer: a. Through careful analysis of the difference between total
overhead cost and total cost of direct laborb. Through careful analysis of
what causes the need for spending for each specific overhead costc. Through
careful analysis of the total amount of overhead included in cost of goods
soldd. Through careful analysis of the total amount of overhead included in
cost of goods manufacturedCorrect is B
◍ Stepped Fixed Costs.
Answer: Remain fixed over a range; Jump to a higher level when activity
exceeds certain thresholds
◍ Relevant Range.
Answer: The range of activity where cost behavior assumptions are valid
◍ Activity Rate.
Answer: Cost pool / cost driver events (Price per drop)
◍ It is November 1 of Year 1. Sales for a decorative supplies company for
November, December, and January (of Year 2) are forecasted to be as
follows:November: $200,000December: $800,000January: $200,000On
average, the cost of goods sold is 70% of sales. During this period, the
company expects inventory levels to remain constant. This means that
inventory purchases are expected to equal the amount of cost of goods
sold.100% of purchases are on credit. Of the credit purchases, 5% are paid
during the month of the purchase, 65% in the month following the purchase,
and 30% in the second month following the purchase.Sales for September
and October of Year 1 were $100,000 and $150,000, respectively.What is
the forecasted amount of total cash payments for purchases in January?.
Answer: a. $371,000b. $397,000c. $406,000d. $413,000Correct is DWe are
solving for cash payments for purchases in January. Note: Purchases are
70% of the sales. November: $200,000 200,000 x 70% = 140,000 purchases
to be paid as follows(M Nov 5%) (M+1 Dec 65%) (M+2 Jan 30%) 140,000
x 30% = 42,000December: $800,000 800,000 x 70% = 560,000 purchases to
be paid as follows(M Dec 5%) (M+1 Jan 65%) 560,000 x 65% =
, $364,000(M+2 Feb 30%) January: $200,000 200,000 x 70% = 140,000
purchases to be paid as follows(M Jan 5%) 140,000 x 5% = 7,000(M+1 Feb
65%) (M+2 Mar) 42,000 + 364,000 + 7,000 = 413,000
◍ What is a cost driver?.
Answer: A numerical measure reflecting the amount of a cost associated
with a particular overhead cost activity
◍ Data for an art supplies company for the year are as follows:Finished goods
inventory, beginning balance$300,000Work-in-process inventory, ending
balance215,000Underapplied manufacturing overhead40,000Finished goods
inventory, ending balance250,000Work-in-process inventory, beginning
balance200,000Cost of goods manufactured685,000What is the company’s
computed adjusted cost of goods sold?.
Answer: a. $630,000b. $710,000c. $715,000d. $775,000Correct is
DKeyUnderapplied manufacturing overhead40,000Unadjusted
COGS=Beginning Finished Goods Inventory+Cost of Goods
Manufactured−Ending Finished Goods Inventory
=300,000+685,000−250,000=735,000Adjusted
COGS=735,000+40,000=775,000Note: underapplied MOH, we add to
COGSoverapplied MOH we deduct from COGS
◍ breakeven point in dollars.
Answer: Fixed Expenses÷CM Ratio
◍ An ABC system is being implemented at a certain factory. An analyst finds
that one of the cost drivers for overhead costs relates to manufacturing staff
time.Which information needs to be gathered next to properly allocate
overhead costs in this situation?.
Answer: Employee time logs and employee interviews
◍ Endothon Company expects the December sales volume in units will be
about 30% lower than October sales. Why is the company possibly
expecting the lower sales volume in units on its American football
equipment in December?.
Answer: The company is expecting much lower demand for football
QUESTIONS WITH ANSWERS GRADED A+
◍ Pre-determined Overhead Rate.
Answer: (All indirect)+DM+DL+Factory Cost+Dep exp÷ Labor Hours
◍ A company's actual manufacturing overhead was $156,000, and applied
manufacturing overhead was $172,000.What should be included in the
journal entry necessary to close the manufacturing overhead account?.
Answer: a. Debit to manufacturing overhead for $16,000.b. Debit to cost of
goods sold for $16,000.c. Debit to cost of goods sold for $156,000.d. Debit
to manufacturing overhead for $156,000.Correct is AApplied MOH was
$172,000Actual MOH was $156,000The difference is $16,000
(over-applied/credit balance)Debit to MOH and Credit to credit to COGS
◍ What is true about debits in the work-in-process T-account during the
period?.
Answer: a. They are costs put into production during the period.b. They are
direct material costs incurred only during the period.c. They are costs of
goods manufactured during the period.d. They are direct labor costs incurred
only during the period.Correct is AWIP will be debited to add cost to
production. MOH will be credited to move applied overhead out of MOH
into WIP
◍ Materials Quantity Variance Formula.
Answer: (SQ - AQ) x SP = Material Qty Variance(Standard Qty - Actual
Qty) x Standard Price = Material Qty Variance
◍ Material Price Variance Formula.
Answer: (SP - AP) x AQ = Material Price Variance(Standard Price - Actual
Price) x Actual Qty = Material Price Variance
◍ How are the costs belonging to a cost pool identified in an activity-based
, costing (ABC) system?.
Answer: a. Through careful analysis of the difference between total
overhead cost and total cost of direct laborb. Through careful analysis of
what causes the need for spending for each specific overhead costc. Through
careful analysis of the total amount of overhead included in cost of goods
soldd. Through careful analysis of the total amount of overhead included in
cost of goods manufacturedCorrect is B
◍ Stepped Fixed Costs.
Answer: Remain fixed over a range; Jump to a higher level when activity
exceeds certain thresholds
◍ Relevant Range.
Answer: The range of activity where cost behavior assumptions are valid
◍ Activity Rate.
Answer: Cost pool / cost driver events (Price per drop)
◍ It is November 1 of Year 1. Sales for a decorative supplies company for
November, December, and January (of Year 2) are forecasted to be as
follows:November: $200,000December: $800,000January: $200,000On
average, the cost of goods sold is 70% of sales. During this period, the
company expects inventory levels to remain constant. This means that
inventory purchases are expected to equal the amount of cost of goods
sold.100% of purchases are on credit. Of the credit purchases, 5% are paid
during the month of the purchase, 65% in the month following the purchase,
and 30% in the second month following the purchase.Sales for September
and October of Year 1 were $100,000 and $150,000, respectively.What is
the forecasted amount of total cash payments for purchases in January?.
Answer: a. $371,000b. $397,000c. $406,000d. $413,000Correct is DWe are
solving for cash payments for purchases in January. Note: Purchases are
70% of the sales. November: $200,000 200,000 x 70% = 140,000 purchases
to be paid as follows(M Nov 5%) (M+1 Dec 65%) (M+2 Jan 30%) 140,000
x 30% = 42,000December: $800,000 800,000 x 70% = 560,000 purchases to
be paid as follows(M Dec 5%) (M+1 Jan 65%) 560,000 x 65% =
, $364,000(M+2 Feb 30%) January: $200,000 200,000 x 70% = 140,000
purchases to be paid as follows(M Jan 5%) 140,000 x 5% = 7,000(M+1 Feb
65%) (M+2 Mar) 42,000 + 364,000 + 7,000 = 413,000
◍ What is a cost driver?.
Answer: A numerical measure reflecting the amount of a cost associated
with a particular overhead cost activity
◍ Data for an art supplies company for the year are as follows:Finished goods
inventory, beginning balance$300,000Work-in-process inventory, ending
balance215,000Underapplied manufacturing overhead40,000Finished goods
inventory, ending balance250,000Work-in-process inventory, beginning
balance200,000Cost of goods manufactured685,000What is the company’s
computed adjusted cost of goods sold?.
Answer: a. $630,000b. $710,000c. $715,000d. $775,000Correct is
DKeyUnderapplied manufacturing overhead40,000Unadjusted
COGS=Beginning Finished Goods Inventory+Cost of Goods
Manufactured−Ending Finished Goods Inventory
=300,000+685,000−250,000=735,000Adjusted
COGS=735,000+40,000=775,000Note: underapplied MOH, we add to
COGSoverapplied MOH we deduct from COGS
◍ breakeven point in dollars.
Answer: Fixed Expenses÷CM Ratio
◍ An ABC system is being implemented at a certain factory. An analyst finds
that one of the cost drivers for overhead costs relates to manufacturing staff
time.Which information needs to be gathered next to properly allocate
overhead costs in this situation?.
Answer: Employee time logs and employee interviews
◍ Endothon Company expects the December sales volume in units will be
about 30% lower than October sales. Why is the company possibly
expecting the lower sales volume in units on its American football
equipment in December?.
Answer: The company is expecting much lower demand for football
