WGU D101 Cost and Managerial Accounting Latest
Update 2026 | Exam Prep | High-Yield Review Guide
1. If a company completes a batch of products and transfers their costs to
finished goods inventory, what subsequent accounting entry would be made
when those products are sold?
Decrease direct materials inventory
Transfer costs from finished goods inventory to cost of goods sold
Increase work-in-process inventory
Record a liability for the sale
2. What defines a price maker in the context of cost and managerial
accounting?
A price maker is a firm that must accept the market price as given.
A price maker is a firm that only sells products at a loss.
A price maker is a firm that operates in a perfectly competitive market.
A price maker is a firm that has the ability to set its own prices due
to market power.
3. Describe why manufacturing bottles of ketchup is an example of process
costing.
Because it involves the continuous production of identical products.
Because it requires extensive customization for each batch.
Because each bottle is uniquely designed for individual customers.
Because it is a service rather than a manufacturing process.
,4. What type of costing system is most suitable for a gasoline refinery?
Job order costing
Variable costing
Process costing
Standard costing
5. Describe the role of the manufacturing overhead account in the context of
job order costing.
The manufacturing overhead account is used to record cash
transactions related to manufacturing.
The manufacturing overhead account tracks the sale of finished
goods to customers.
The manufacturing overhead account accumulates all actual
overhead costs incurred, which are then allocated to jobs based on
predetermined rates.
The manufacturing overhead account is used to record direct labor
costs associated with jobs.
6. Which of the following would be debited (increased) to assign direct labor
costs actually incurred?
Work-in-Process Inventory
Manufacturing Overhead
Finished Goods Inventory
Wages Payable
,7. If a company applies $50,000 of manufacturing overhead, what is the impact
on the manufacturing overhead account?
The manufacturing overhead account will be debited by $50,000.
The manufacturing overhead account will be credited by $50,000.
The manufacturing overhead account will remain unchanged.
The manufacturing overhead account will be credited by $25,000 and
debited by $25,000.
8. If a company with accurate job cost information identifies high production
costs in a specific area, what action should it take to improve profitability?
Increase the prices of all products.
Hire more employees to increase output.
Analyze and reduce the costs associated with that area.
Invest in marketing to boost sales.
9. Which type of company should use job order costing?
Soda bottler
Paper towel manufacturer
Commercial aircraft manufacturer
Air filter manufacturer
10. What is the term used for manufacturing overhead that has not been fully
applied to jobs during the accounting period?
Actual manufacturing overhead
Overapplied manufacturing overhead
, Estimated manufacturing overhead
Underapplied manufacturing overhead
11. The costs of all jobs completed but not yet sold are in the ____ Inventory
account.
Finished Goods
Raw Materials
Work-in-Process
Good Available for Sale
12. Describe the impact of underapplied manufacturing overhead on the
financial statements.
Underapplied manufacturing overhead increases the cost of goods
sold, reducing net income.
Underapplied manufacturing overhead has no effect on the financial
statements.
Underapplied manufacturing overhead decreases the cost of goods
sold, increasing net income.
Underapplied manufacturing overhead increases assets on the
balance sheet.
13. When the manufacturing process is completed, the product costs are
transferred to
Raw Materials Inventory
Finished Goods Inventory
Work-in-Process Inventory
Manufacturing Overhead account
Update 2026 | Exam Prep | High-Yield Review Guide
1. If a company completes a batch of products and transfers their costs to
finished goods inventory, what subsequent accounting entry would be made
when those products are sold?
Decrease direct materials inventory
Transfer costs from finished goods inventory to cost of goods sold
Increase work-in-process inventory
Record a liability for the sale
2. What defines a price maker in the context of cost and managerial
accounting?
A price maker is a firm that must accept the market price as given.
A price maker is a firm that only sells products at a loss.
A price maker is a firm that operates in a perfectly competitive market.
A price maker is a firm that has the ability to set its own prices due
to market power.
3. Describe why manufacturing bottles of ketchup is an example of process
costing.
Because it involves the continuous production of identical products.
Because it requires extensive customization for each batch.
Because each bottle is uniquely designed for individual customers.
Because it is a service rather than a manufacturing process.
,4. What type of costing system is most suitable for a gasoline refinery?
Job order costing
Variable costing
Process costing
Standard costing
5. Describe the role of the manufacturing overhead account in the context of
job order costing.
The manufacturing overhead account is used to record cash
transactions related to manufacturing.
The manufacturing overhead account tracks the sale of finished
goods to customers.
The manufacturing overhead account accumulates all actual
overhead costs incurred, which are then allocated to jobs based on
predetermined rates.
The manufacturing overhead account is used to record direct labor
costs associated with jobs.
6. Which of the following would be debited (increased) to assign direct labor
costs actually incurred?
Work-in-Process Inventory
Manufacturing Overhead
Finished Goods Inventory
Wages Payable
,7. If a company applies $50,000 of manufacturing overhead, what is the impact
on the manufacturing overhead account?
The manufacturing overhead account will be debited by $50,000.
The manufacturing overhead account will be credited by $50,000.
The manufacturing overhead account will remain unchanged.
The manufacturing overhead account will be credited by $25,000 and
debited by $25,000.
8. If a company with accurate job cost information identifies high production
costs in a specific area, what action should it take to improve profitability?
Increase the prices of all products.
Hire more employees to increase output.
Analyze and reduce the costs associated with that area.
Invest in marketing to boost sales.
9. Which type of company should use job order costing?
Soda bottler
Paper towel manufacturer
Commercial aircraft manufacturer
Air filter manufacturer
10. What is the term used for manufacturing overhead that has not been fully
applied to jobs during the accounting period?
Actual manufacturing overhead
Overapplied manufacturing overhead
, Estimated manufacturing overhead
Underapplied manufacturing overhead
11. The costs of all jobs completed but not yet sold are in the ____ Inventory
account.
Finished Goods
Raw Materials
Work-in-Process
Good Available for Sale
12. Describe the impact of underapplied manufacturing overhead on the
financial statements.
Underapplied manufacturing overhead increases the cost of goods
sold, reducing net income.
Underapplied manufacturing overhead has no effect on the financial
statements.
Underapplied manufacturing overhead decreases the cost of goods
sold, increasing net income.
Underapplied manufacturing overhead increases assets on the
balance sheet.
13. When the manufacturing process is completed, the product costs are
transferred to
Raw Materials Inventory
Finished Goods Inventory
Work-in-Process Inventory
Manufacturing Overhead account
