Principles of Financial and Managerial
Accounting - D196 WGU ACTUAL
QUESTIONS AND CORRECT ANSWERS
the production budget - CORRECT ANSWERS✅✅Sales budget + ending finished goods
inventory - beginning finished goods inventory
direct materials production budget - CORRECT ANSWERS✅✅Production budget × direct
materials per unit
the direct materials purchases budget - CORRECT ANSWERS✅✅Direct materials
production budget + ending direct materials inventory - beginning direct materials inventory
Cash collected from customers - CORRECT ANSWERS✅✅(current period revenue ×
current period collection rate) + cash collected from previous period sales
Cash payments to suppliers - CORRECT ANSWERS✅✅(current period purchases × current
period payment rate) + cash paid on previous period purchases
Cost Variance - CORRECT ANSWERS✅✅Difference between actual costs and budgeted
costs
Contribution Margin - CORRECT ANSWERS✅✅= Sales Revenue - Variable Costs
The difference between total sales and variable costs; the portion of sales revenue available to
cover fixed costs and provide a profit.
Target Income - CORRECT ANSWERS✅✅= Sales Revenue - Variable Costs - Fixed Costs
A profit level desired by management.
At break-even - CORRECT ANSWERS✅✅Target income = 0
Sales Revenue - CORRECT ANSWERS✅✅= Sales Price x Number of Units
,Variable Costs - CORRECT ANSWERS✅✅= Variable Cost per Unit x Number of Units
Costs that change in total in direct proportion to changes in activity level.
Variable Cost Ratio x Sales Revenue - CORRECT ANSWERS✅✅Variable Costs
Unit-level activities - CORRECT ANSWERS✅✅Activities that take place each time a unit
of product is produced.
Batch-level activities - CORRECT ANSWERS✅✅Activities that take place in order to
support a batch or production run, regardless of the size of the batch.
Product-line Activities - CORRECT ANSWERS✅✅Activities that take place in order to
support a product line, regardless of the number of batches or individual units produced.
cost pool - CORRECT ANSWERS✅✅Total cost being generated by a specific overhead
cost activity.
cost driver - CORRECT ANSWERS✅✅A numerical measure used to reflect the amount of
a specific cost that is associated with a particular activity
Activity rate - CORRECT ANSWERS✅✅The amount of the estimated cost pool divided by
the estimated number of cost driver events
How do expenses impact the accounting equation? - CORRECT ANSWERS✅✅Expenses
decrease owners' equity
Purpose of the accounting cycle? - CORRECT ANSWERS✅✅To turn information about
transactions into financial statements
How is gross profit computed? - CORRECT ANSWERS✅✅Sales minus cost of good sold
, Which type of account is retained earnings? - CORRECT ANSWERS✅✅Equity
How does a classified balance sheet provide useful info to a decision maker? - CORRECT
ANSWERS✅✅It distinguishes between current and long-term assets
What are the three primary functions that company managers use managerial accounting info
for? - CORRECT ANSWERS✅✅Planning, controlling, evaluating
How could a period cost be reported in an income statement? - CORRECT
ANSWERS✅✅As an admin expense
How are the wages of the cashiers classified in a merchandising company? - CORRECT
ANSWERS✅✅Selling expense
What is the label given to the quantity computed as estimated level of activity - CORRECT
ANSWERS✅✅Predetermined overhead rate
In a job order costing system, what is the proper accounting for a product cost? - CORRECT
ANSWERS✅✅It is reported as a part of cost of goods sold
Which item is a period cost? - CORRECT ANSWERS✅✅Utility bills to heat the
headquarters building
Accounting System - CORRECT ANSWERS✅✅The procedures and processes used by a
business to analyze transactions, handle routine bookkeeping tasks, and structure information
so it can be used to evaluate the performance and health of the business.
Activity-based Costing (ABC) - CORRECT ANSWERS✅✅A method of attributing
overhead costs to products based on measurable factors that relate to activities that create
overhead costs.
Arm's-length Transaction - CORRECT ANSWERS✅✅A transaction in which a buyer and
seller act independently to get the best possible deal.
Accounting - D196 WGU ACTUAL
QUESTIONS AND CORRECT ANSWERS
the production budget - CORRECT ANSWERS✅✅Sales budget + ending finished goods
inventory - beginning finished goods inventory
direct materials production budget - CORRECT ANSWERS✅✅Production budget × direct
materials per unit
the direct materials purchases budget - CORRECT ANSWERS✅✅Direct materials
production budget + ending direct materials inventory - beginning direct materials inventory
Cash collected from customers - CORRECT ANSWERS✅✅(current period revenue ×
current period collection rate) + cash collected from previous period sales
Cash payments to suppliers - CORRECT ANSWERS✅✅(current period purchases × current
period payment rate) + cash paid on previous period purchases
Cost Variance - CORRECT ANSWERS✅✅Difference between actual costs and budgeted
costs
Contribution Margin - CORRECT ANSWERS✅✅= Sales Revenue - Variable Costs
The difference between total sales and variable costs; the portion of sales revenue available to
cover fixed costs and provide a profit.
Target Income - CORRECT ANSWERS✅✅= Sales Revenue - Variable Costs - Fixed Costs
A profit level desired by management.
At break-even - CORRECT ANSWERS✅✅Target income = 0
Sales Revenue - CORRECT ANSWERS✅✅= Sales Price x Number of Units
,Variable Costs - CORRECT ANSWERS✅✅= Variable Cost per Unit x Number of Units
Costs that change in total in direct proportion to changes in activity level.
Variable Cost Ratio x Sales Revenue - CORRECT ANSWERS✅✅Variable Costs
Unit-level activities - CORRECT ANSWERS✅✅Activities that take place each time a unit
of product is produced.
Batch-level activities - CORRECT ANSWERS✅✅Activities that take place in order to
support a batch or production run, regardless of the size of the batch.
Product-line Activities - CORRECT ANSWERS✅✅Activities that take place in order to
support a product line, regardless of the number of batches or individual units produced.
cost pool - CORRECT ANSWERS✅✅Total cost being generated by a specific overhead
cost activity.
cost driver - CORRECT ANSWERS✅✅A numerical measure used to reflect the amount of
a specific cost that is associated with a particular activity
Activity rate - CORRECT ANSWERS✅✅The amount of the estimated cost pool divided by
the estimated number of cost driver events
How do expenses impact the accounting equation? - CORRECT ANSWERS✅✅Expenses
decrease owners' equity
Purpose of the accounting cycle? - CORRECT ANSWERS✅✅To turn information about
transactions into financial statements
How is gross profit computed? - CORRECT ANSWERS✅✅Sales minus cost of good sold
, Which type of account is retained earnings? - CORRECT ANSWERS✅✅Equity
How does a classified balance sheet provide useful info to a decision maker? - CORRECT
ANSWERS✅✅It distinguishes between current and long-term assets
What are the three primary functions that company managers use managerial accounting info
for? - CORRECT ANSWERS✅✅Planning, controlling, evaluating
How could a period cost be reported in an income statement? - CORRECT
ANSWERS✅✅As an admin expense
How are the wages of the cashiers classified in a merchandising company? - CORRECT
ANSWERS✅✅Selling expense
What is the label given to the quantity computed as estimated level of activity - CORRECT
ANSWERS✅✅Predetermined overhead rate
In a job order costing system, what is the proper accounting for a product cost? - CORRECT
ANSWERS✅✅It is reported as a part of cost of goods sold
Which item is a period cost? - CORRECT ANSWERS✅✅Utility bills to heat the
headquarters building
Accounting System - CORRECT ANSWERS✅✅The procedures and processes used by a
business to analyze transactions, handle routine bookkeeping tasks, and structure information
so it can be used to evaluate the performance and health of the business.
Activity-based Costing (ABC) - CORRECT ANSWERS✅✅A method of attributing
overhead costs to products based on measurable factors that relate to activities that create
overhead costs.
Arm's-length Transaction - CORRECT ANSWERS✅✅A transaction in which a buyer and
seller act independently to get the best possible deal.
