WGU D196 OA LATEST EXAM PREP
QUESTIONS AND ANSWERS PDF 2026
▶ 23. A company reports the following data:
Total sales revenue = $275,000
Number of units sold = 25,000 units
Variable costs = $100,000
If the company is operating at its break-even point, what is the company's
total contribution margin?
a.$250,000
b.$175,000
c.$150,000
d. $125,000. Answer: b
▶ 24. How are period costs reported on an income statement?
a. As revenue
b. As an expense
c. As cost of goods sold
d. As an asset. Answer: b
▶ 25. Which item is an example of a controllable cost?
a. Advertising costs
b. Rent expense
c. Depreciation
d. Customer tastes and economic conditions. Answer: a
▶ 26. A company purchases equipment with a note payable. How does this
transaction affect the paying company's accounting equation? a.Asset
increases; Liability increases
b.Asset increases; Asset decreases
c. Asset increases; Expense increases
d .Asset increases; Equity decreases. Answer: a
▶ 27. What is the impact of paying employee wages on the accounting
equation?
a.Increase owner's equity
,b.Increase expense
c. Decrease expense
d .Increase asset. Answer: b
▶ 28. Which account is summarized on the balance sheet?
a.Expense account
b. Owner's equity
c. Revenue account
d. Cost of good sold. Answer: b
▶ 29. A retail company purchased inventory costing $100,000. By the end
of the year, inventory costing $75,000 had been sold. How is the cost of
inventory reported in the financial statements?
a.$75,000 COGS on balance sheet
b.$75,000 inventory on balance sheet
c.$75,000 COGS on income statement
d. $75,000 inventory on income statement. Answer: c
▶ 30. Which of the following is an example of a merchandising company?
a.Furniture maker
b.Locksmith
c.Landscaper
d. Clothing store. Answer: d
▶ 31. Actual manufacturing overhead includes which of the following?
a.Direct labor and direct materials expenses
b.Manufacturing costs other than direct labor and direct materials
c. Manufacturing costs including direct labor and direct materials
d .Non-manufacturing costs other than direct labor and direct materials.
Answer: b
▶ 32. Activity based costing could be used by which of the following
companies?
a.Large commercial and industrial construction
b.Healthcare organization
c.Car manufacturing company
d. All of the above could use activity based costing. Answer: d
▶ 33. How are the wages of a production supervisors classified in a
manufacturing company?
, a.Direct labor expense
b. Manufacturing overhead
c. Selling expense
d .Direct materials expense. Answer: b
▶ 34. Which of the following is not an example of a cost driver?
a. Administrative expenses
b. Direct labor hours
c. Machine hours
d .Number of inspections. Answer: a
▶ 35. What is not an example of direct materials?
a. Cost of aluminum in making an airplane
b. Cost of saws and hammers in constructing a house
c .Cost of fabric in making clothing
d. Cost of wood in making furniture. Answer: b
▶ 36. Which describes overapplied overhead?
Less has been spent than anticipated for the level of achieved production
b. More has been spent than anticipated for the level of achieved
production
c. More has been spent than anticipated for direct labor and materials
d None of the above. Answer: a
▶ 37. Which statement is true with respect to activity-based costing (ABC)
systems?
a. An ABC system helps to provide more accurate product costing and
better decision making
b. Implementing an ABC system requires very little analysis of the factors
that create overhead costs
c. Implementing an ABC system requires only a careful calculation of total
direct labor hours
d. An ABC system assumes that all products, projects, and processes
consume the overhead infrastructure services in direct proportion to a
single measure of activity.. Answer: a
▶ 38. What is the first budget that is prepared in a manufacturing
business?
a .Direct materials
b. Production
QUESTIONS AND ANSWERS PDF 2026
▶ 23. A company reports the following data:
Total sales revenue = $275,000
Number of units sold = 25,000 units
Variable costs = $100,000
If the company is operating at its break-even point, what is the company's
total contribution margin?
a.$250,000
b.$175,000
c.$150,000
d. $125,000. Answer: b
▶ 24. How are period costs reported on an income statement?
a. As revenue
b. As an expense
c. As cost of goods sold
d. As an asset. Answer: b
▶ 25. Which item is an example of a controllable cost?
a. Advertising costs
b. Rent expense
c. Depreciation
d. Customer tastes and economic conditions. Answer: a
▶ 26. A company purchases equipment with a note payable. How does this
transaction affect the paying company's accounting equation? a.Asset
increases; Liability increases
b.Asset increases; Asset decreases
c. Asset increases; Expense increases
d .Asset increases; Equity decreases. Answer: a
▶ 27. What is the impact of paying employee wages on the accounting
equation?
a.Increase owner's equity
,b.Increase expense
c. Decrease expense
d .Increase asset. Answer: b
▶ 28. Which account is summarized on the balance sheet?
a.Expense account
b. Owner's equity
c. Revenue account
d. Cost of good sold. Answer: b
▶ 29. A retail company purchased inventory costing $100,000. By the end
of the year, inventory costing $75,000 had been sold. How is the cost of
inventory reported in the financial statements?
a.$75,000 COGS on balance sheet
b.$75,000 inventory on balance sheet
c.$75,000 COGS on income statement
d. $75,000 inventory on income statement. Answer: c
▶ 30. Which of the following is an example of a merchandising company?
a.Furniture maker
b.Locksmith
c.Landscaper
d. Clothing store. Answer: d
▶ 31. Actual manufacturing overhead includes which of the following?
a.Direct labor and direct materials expenses
b.Manufacturing costs other than direct labor and direct materials
c. Manufacturing costs including direct labor and direct materials
d .Non-manufacturing costs other than direct labor and direct materials.
Answer: b
▶ 32. Activity based costing could be used by which of the following
companies?
a.Large commercial and industrial construction
b.Healthcare organization
c.Car manufacturing company
d. All of the above could use activity based costing. Answer: d
▶ 33. How are the wages of a production supervisors classified in a
manufacturing company?
, a.Direct labor expense
b. Manufacturing overhead
c. Selling expense
d .Direct materials expense. Answer: b
▶ 34. Which of the following is not an example of a cost driver?
a. Administrative expenses
b. Direct labor hours
c. Machine hours
d .Number of inspections. Answer: a
▶ 35. What is not an example of direct materials?
a. Cost of aluminum in making an airplane
b. Cost of saws and hammers in constructing a house
c .Cost of fabric in making clothing
d. Cost of wood in making furniture. Answer: b
▶ 36. Which describes overapplied overhead?
Less has been spent than anticipated for the level of achieved production
b. More has been spent than anticipated for the level of achieved
production
c. More has been spent than anticipated for direct labor and materials
d None of the above. Answer: a
▶ 37. Which statement is true with respect to activity-based costing (ABC)
systems?
a. An ABC system helps to provide more accurate product costing and
better decision making
b. Implementing an ABC system requires very little analysis of the factors
that create overhead costs
c. Implementing an ABC system requires only a careful calculation of total
direct labor hours
d. An ABC system assumes that all products, projects, and processes
consume the overhead infrastructure services in direct proportion to a
single measure of activity.. Answer: a
▶ 38. What is the first budget that is prepared in a manufacturing
business?
a .Direct materials
b. Production
