WGU D101 Cost and Managerial Accounting |OA|
Objective Assessment | Actual Questions and
Answers (Verified Answers), 100% Guaranteed
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1. An increase in direct labor hours used in production most directly affects
which cost behavior?
A. Variable cost
B. Fixed cost
C. Sunk cost
D. Opportunity cost
Answer: A
Rationale: Direct labor that varies with output is typically variable.
2. If fixed manufacturing overhead is underapplied at year-end, the most likely
reason is:
A. Actual overhead exceeded applied overhead
B. Applied overhead exceeded actual overhead
C. Direct materials were overused
D. Sales were below budget
Answer: A
Rationale: Underapplied overhead means actual overhead is greater than
applied overhead.
3. Which cost should be excluded from a make-or-buy decision?
A. Sunk cost
B. Direct materials
C. Avoidable fixed cost
D. Opportunity cost
Answer: A
Rationale: Sunk costs cannot be changed by the decision, so they are
irrelevant.
4. A company has one constrained machine hour. To maximize profit, the
product mix should prioritize the product with the highest:
, A. Selling price
B. Contribution margin per constrained unit
C. Total fixed cost
D. Units produced
Answer: B
Rationale: Scarce resources should go to the highest contribution per
limiting factor.
5. If sales increase while total fixed costs remain unchanged, operating
leverage will generally:
A. Decrease risk
B. Increase risk and magnify operating income changes
C. Eliminate break-even point
D. Lower contribution margin
Answer: B
Rationale: Higher operating leverage means profits are more sensitive to
sales changes.
6. In a traditional job-order costing system, indirect materials are usually traced
to jobs through:
A. Direct materials
B. Selling expense
C. Manufacturing overhead
D. Administrative expense
Answer: C
Rationale: Indirect materials are not traced economically to individual jobs.
7. A favorable labor efficiency variance means:
A. Workers used more hours than standard allowed
B. Workers used fewer labor hours than standard allowed
C. Wage rates were higher than standard
D. Fixed costs were lower than budget
Answer: B
Rationale: Efficiency variance compares actual hours with standard hours
allowed.
8. Which budget is prepared first in the master budgeting process?
A. Cash budget
B. Sales budget
, C. Direct labor budget
D. Budgeted balance sheet
Answer: B
Rationale: The sales budget drives the rest of the master budget.
9. A static budget is different from a flexible budget because a static budget:
A. Adjusts to actual sales volume
B. Is based on one activity level
C. Includes only cash flows
D. Ignores overhead
Answer: B
Rationale: Static budgets do not adjust for actual output.
10.Which of the following is a period cost?
A. Factory rent
B. Direct materials
C. Selling expense
D. Work in process
Answer: C
Rationale: Period costs are expensed when incurred.
11.When allocating joint costs, the sales value at splitoff method uses:
A. Physical measures only
B. Relative sales value at splitoff
C. Net realizable value after further processing only
D. Equal allocation to each product
Answer: B
Rationale: Joint costs are assigned based on market value at splitoff.
12.Equivalent units under weighted-average process costing include:
A. Only completed units
B. Beginning inventory only
C. Units started and completed plus ending WIP equivalence
D. Sales units only
Answer: C
Rationale: Weighted-average blends beginning inventory with current costs.
13.In activity-based costing, a cost pool is assigned using a:
A. Cost driver
B. Sales forecast
Objective Assessment | Actual Questions and
Answers (Verified Answers), 100% Guaranteed
Pass || Complete A+ Guide
1. An increase in direct labor hours used in production most directly affects
which cost behavior?
A. Variable cost
B. Fixed cost
C. Sunk cost
D. Opportunity cost
Answer: A
Rationale: Direct labor that varies with output is typically variable.
2. If fixed manufacturing overhead is underapplied at year-end, the most likely
reason is:
A. Actual overhead exceeded applied overhead
B. Applied overhead exceeded actual overhead
C. Direct materials were overused
D. Sales were below budget
Answer: A
Rationale: Underapplied overhead means actual overhead is greater than
applied overhead.
3. Which cost should be excluded from a make-or-buy decision?
A. Sunk cost
B. Direct materials
C. Avoidable fixed cost
D. Opportunity cost
Answer: A
Rationale: Sunk costs cannot be changed by the decision, so they are
irrelevant.
4. A company has one constrained machine hour. To maximize profit, the
product mix should prioritize the product with the highest:
, A. Selling price
B. Contribution margin per constrained unit
C. Total fixed cost
D. Units produced
Answer: B
Rationale: Scarce resources should go to the highest contribution per
limiting factor.
5. If sales increase while total fixed costs remain unchanged, operating
leverage will generally:
A. Decrease risk
B. Increase risk and magnify operating income changes
C. Eliminate break-even point
D. Lower contribution margin
Answer: B
Rationale: Higher operating leverage means profits are more sensitive to
sales changes.
6. In a traditional job-order costing system, indirect materials are usually traced
to jobs through:
A. Direct materials
B. Selling expense
C. Manufacturing overhead
D. Administrative expense
Answer: C
Rationale: Indirect materials are not traced economically to individual jobs.
7. A favorable labor efficiency variance means:
A. Workers used more hours than standard allowed
B. Workers used fewer labor hours than standard allowed
C. Wage rates were higher than standard
D. Fixed costs were lower than budget
Answer: B
Rationale: Efficiency variance compares actual hours with standard hours
allowed.
8. Which budget is prepared first in the master budgeting process?
A. Cash budget
B. Sales budget
, C. Direct labor budget
D. Budgeted balance sheet
Answer: B
Rationale: The sales budget drives the rest of the master budget.
9. A static budget is different from a flexible budget because a static budget:
A. Adjusts to actual sales volume
B. Is based on one activity level
C. Includes only cash flows
D. Ignores overhead
Answer: B
Rationale: Static budgets do not adjust for actual output.
10.Which of the following is a period cost?
A. Factory rent
B. Direct materials
C. Selling expense
D. Work in process
Answer: C
Rationale: Period costs are expensed when incurred.
11.When allocating joint costs, the sales value at splitoff method uses:
A. Physical measures only
B. Relative sales value at splitoff
C. Net realizable value after further processing only
D. Equal allocation to each product
Answer: B
Rationale: Joint costs are assigned based on market value at splitoff.
12.Equivalent units under weighted-average process costing include:
A. Only completed units
B. Beginning inventory only
C. Units started and completed plus ending WIP equivalence
D. Sales units only
Answer: C
Rationale: Weighted-average blends beginning inventory with current costs.
13.In activity-based costing, a cost pool is assigned using a:
A. Cost driver
B. Sales forecast
