WGU C253 ADVANCED MANAGERIAL
ACCOUNTING EXAM WITH 100% CORRECT
ANSWERS 2026
Absorption costing correct answers >> A costing method that includes all
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manufacturing costs—direct materials, direct labor, and both variable and fixed
h h h h h h h h h h
manufacturing overhead—in unit product costs.
h h h h h
Activity correct answers >> An event that causes the consumption of
hhhhhh h h hhh h h h h h h
overhead resources in an organization.
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Activity base correct answers >> A measure of whatever causes the
h hhhhhh h h hhh h h h h h
incurrence of a variable cost. For example, the total cost of surgical gloves in a
h h h h h h h h h h h h h h h
hospital will increase as the number of surgeries increases. Therefore, the
h h h h h h h h h h h
number of surgeries is the activity base that explains the total cost of surgical
h h h h h h h h h h h h h h
gloves.
h
Activity cost pool correct answers >> A "bucket" in which costs are
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accumulated that relate to a single activity measure in an activity-based costing
h h h h h h h h h h h h
system.
h
Activity measure h correct answers >> An allocation base in an activity-based
hhhhhh h h hhh h h h h h
costing system; ideally, a measure of the amount of activity that drives the costs
h h h h h h h h h h h h h h
in an activity cost pool.
h h h h h
Activity variance hcorrect answers >> The difference between a revenue or
hhhhhh h h hhh h h h h h
cost item in the flexible budget and the same item in the static planning budget.
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An activity variance is due solely to the difference between the actual level of
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,h activity used in the flexible budget and the level of activity assumed in the
h h h h h h h h h h h h h
h planning budget. h
Activity-based costing (ABC) correct answers >> A costing method based on
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activities that is designed to provide managers with cost information for strategic
h h h h h h h h h h h h
and other decisions that potentially affect capacity and therefore fixed as well as
h h h h h h h h h h h h h
variable costs.
h h
Activity-based management (ABM) correct answers >> A management
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approach that focuses on managing activities as a way of eliminating waste and
h h h h h h h h h h h h h
reducing delays and defects.
h h h h
Administrative costs correct answers >> All executive, organizational, and
h hhhhhh h h hhh h h h
clerical costs associated with the general management of an organization rather
h h h h h h h h h h h
than with manufacturing or selling.
h h h h h
Allocation base correct answers >> A measure of activity such as direct labor-
h hhhhhh h h hhh h h h h h h h
hours or machine-hours that is used to assign costs to cost objects.
h h h h h h h h h h h
Avoidable cost correct answers >> A cost that can be eliminated by choosing
h hhhhhh h h hhh h h h h h h h
one alternative over another in a decision. This term is synonymous with
h h h h h h h h h h h h
differential cost and relevant cost.
h h h h h
Batch-level activities correct answers >> Activities that are performed each
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time a batch of goods is handled or processed, regardless of how many units are
h h h h h h h h h h h h h h h
in the batch. The amount of resource consumed depends on the number of
h h h h h h h h h h h h h
batches run rather than on the number of units in the batch.
h h h h h h h h h h h h
, Benchmarking correct answers >> A systematic approach to identifying the
hhhhhh h h hhh h h h h h
activities with the greatest potential for improvement.
h h h h h h h
Bill of materials
h correct answers >> A document that shows the quantity of
h hhhhhh h h hhh h h h h h h
each type of direct material required to make a product.
h h h h h h h h h h
Bottleneck correct answers >> A machine or some other part of a process
hhhhhh h h hhh h h h h h h h h
that limits the total output of the entire system.
h h h h h h h h h
Break-even point h hhhhhh correct answers >> The level of sales at which profit is zero.
h h hhh h h h h h h h h
Budget correct answers >> A detailed plan for the future that is usually
hhhhhh h h hhh h h h h h h h h
expressed in formal quantitative terms.
h h h h h
Capital budgeting correct answers >> The process of planning significant
h hhhhhh h h hhh h h h h
investments in projects that have long-term implications such as the purchase of
h h h h h h h h h h h h
new equipment or the introduction of a new product.
h h h h h h h h h
Cash budget correct answers >> A detailed plan showing how cash resources
h hhhhhh h h hhh h h h h h h
will be acquired and used over a specific time period.
h h h h h h h h h h
Committed fixed costs correct answers >> Investments in facilities,
h h hhhhhh h h hhh h h
equipment, and basic organizational structure that can't be significantly reduced
h h h h h h h h h h
even for short periods of time without making fundamental changes.
h h h h h h h h h h
Common cost correct answers >> A cost that is incurred to support a number
h hhhhhh h h hhh h h h h h h h h
of cost objects but that cannot be traced to them individually. For example, the
h h h h h h h h h h h h h h
wage cost of the pilot of a 747 airliner is a common cost of all of the passengers
h h h h h h h h h h h h h h h h h h
ACCOUNTING EXAM WITH 100% CORRECT
ANSWERS 2026
Absorption costing correct answers >> A costing method that includes all
h hhhhhh h h hhh h h h h h
manufacturing costs—direct materials, direct labor, and both variable and fixed
h h h h h h h h h h
manufacturing overhead—in unit product costs.
h h h h h
Activity correct answers >> An event that causes the consumption of
hhhhhh h h hhh h h h h h h
overhead resources in an organization.
h h h h h
Activity base correct answers >> A measure of whatever causes the
h hhhhhh h h hhh h h h h h
incurrence of a variable cost. For example, the total cost of surgical gloves in a
h h h h h h h h h h h h h h h
hospital will increase as the number of surgeries increases. Therefore, the
h h h h h h h h h h h
number of surgeries is the activity base that explains the total cost of surgical
h h h h h h h h h h h h h h
gloves.
h
Activity cost pool correct answers >> A "bucket" in which costs are
h h hhhhhh h h hhh h h h h h
accumulated that relate to a single activity measure in an activity-based costing
h h h h h h h h h h h h
system.
h
Activity measure h correct answers >> An allocation base in an activity-based
hhhhhh h h hhh h h h h h
costing system; ideally, a measure of the amount of activity that drives the costs
h h h h h h h h h h h h h h
in an activity cost pool.
h h h h h
Activity variance hcorrect answers >> The difference between a revenue or
hhhhhh h h hhh h h h h h
cost item in the flexible budget and the same item in the static planning budget.
h h h h h h h h h h h h h h h
An activity variance is due solely to the difference between the actual level of
h h h h h h h h h h h h h h
,h activity used in the flexible budget and the level of activity assumed in the
h h h h h h h h h h h h h
h planning budget. h
Activity-based costing (ABC) correct answers >> A costing method based on
h h hhhhhh h h hhh h h h h
activities that is designed to provide managers with cost information for strategic
h h h h h h h h h h h h
and other decisions that potentially affect capacity and therefore fixed as well as
h h h h h h h h h h h h h
variable costs.
h h
Activity-based management (ABM) correct answers >> A management
h h hhhhhh h h hhh h
approach that focuses on managing activities as a way of eliminating waste and
h h h h h h h h h h h h h
reducing delays and defects.
h h h h
Administrative costs correct answers >> All executive, organizational, and
h hhhhhh h h hhh h h h
clerical costs associated with the general management of an organization rather
h h h h h h h h h h h
than with manufacturing or selling.
h h h h h
Allocation base correct answers >> A measure of activity such as direct labor-
h hhhhhh h h hhh h h h h h h h
hours or machine-hours that is used to assign costs to cost objects.
h h h h h h h h h h h
Avoidable cost correct answers >> A cost that can be eliminated by choosing
h hhhhhh h h hhh h h h h h h h
one alternative over another in a decision. This term is synonymous with
h h h h h h h h h h h h
differential cost and relevant cost.
h h h h h
Batch-level activities correct answers >> Activities that are performed each
h hhhhhh h h hhh h h h h
time a batch of goods is handled or processed, regardless of how many units are
h h h h h h h h h h h h h h h
in the batch. The amount of resource consumed depends on the number of
h h h h h h h h h h h h h
batches run rather than on the number of units in the batch.
h h h h h h h h h h h h
, Benchmarking correct answers >> A systematic approach to identifying the
hhhhhh h h hhh h h h h h
activities with the greatest potential for improvement.
h h h h h h h
Bill of materials
h correct answers >> A document that shows the quantity of
h hhhhhh h h hhh h h h h h h
each type of direct material required to make a product.
h h h h h h h h h h
Bottleneck correct answers >> A machine or some other part of a process
hhhhhh h h hhh h h h h h h h h
that limits the total output of the entire system.
h h h h h h h h h
Break-even point h hhhhhh correct answers >> The level of sales at which profit is zero.
h h hhh h h h h h h h h
Budget correct answers >> A detailed plan for the future that is usually
hhhhhh h h hhh h h h h h h h h
expressed in formal quantitative terms.
h h h h h
Capital budgeting correct answers >> The process of planning significant
h hhhhhh h h hhh h h h h
investments in projects that have long-term implications such as the purchase of
h h h h h h h h h h h h
new equipment or the introduction of a new product.
h h h h h h h h h
Cash budget correct answers >> A detailed plan showing how cash resources
h hhhhhh h h hhh h h h h h h
will be acquired and used over a specific time period.
h h h h h h h h h h
Committed fixed costs correct answers >> Investments in facilities,
h h hhhhhh h h hhh h h
equipment, and basic organizational structure that can't be significantly reduced
h h h h h h h h h h
even for short periods of time without making fundamental changes.
h h h h h h h h h h
Common cost correct answers >> A cost that is incurred to support a number
h hhhhhh h h hhh h h h h h h h h
of cost objects but that cannot be traced to them individually. For example, the
h h h h h h h h h h h h h h
wage cost of the pilot of a 747 airliner is a common cost of all of the passengers
h h h h h h h h h h h h h h h h h h
