WGU Accounting for Decision Makers C213 VAC2 : Accounting-for-Decision-Makers exam

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WGU Accounting-for-Decision-Makers Exam Syllabus Topics:

WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. A company presently uses traditional volume-based costing to allocate overhead to its products.
The following table provides information on two of the company's products:
Product A
Product B
Selling price
$8
$12
Direct material
$2
$3
Direct labor
$1
$2
Applied overhead
$3
$4
Gross margin
$2
$3
Overhead that would be applied to Product A would increase to $8 per unit after identifying cost pools and cost drivers, and the overhead applied to Product B would drop to $2 per unit .
How would this change in the way overhead is allocated affect the selling price of both products?

A) The price of Product A would decrease, and the price of Product B would increase
B) The price of Product A would increase, and the price of Product B would increase
C) The price of Product A would increase, and the price of Product B would decrease
D) The price of neither product would change

2. A company has three product lines and has historically used the traditional costing system to allocate overhead costs to each product line. Due to significant differences in the production processes for the three product lines, the company implemented an activity-based costing study and identified the activity-based cost for each product, as shown in the following table.
Product A
Product B
Product C
Traditional cost per unit
$558
$1,375
$1,211
Activity-based cost per unit
$675
$1,585
$1,350
Selling price per unit
$650
$1,450
$1,300
What do these data points reveal about the selling price of this company's products?

A) The selling price should increase for all three products
B) No change should be made to the selling price
C) The selling price for only Products A and C should increase
D) The selling price for only Product B should increase

3. What does it mean if a company has a debt ratio of 101.5%?

A) The company has 1.5% more total liabilities than net income
B) The company has 1.5% more total liabilities than total assets
C) The company has 1.5% more total liabilities than gross sales
D) The company has 1.5% more current liabilities than current assets

4. Which item is an operating activity under a U.S. generally accepted accounting principles (GAAP) statement of cash flows?

A) Cash payments for administration expenses
B) Cash receipts for the sale of plant assets
C) Cash receipts from the sale of a business segment
D) Cash payments for purchase of plant assets

5. What is a cost incurred as part of the production process?

A) Period cost
B) Sunk cost
C) Opportunity cost
D) Raw materials cost

Solutions: