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

WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. A company allocates overhead based on the number of shoes produced.
The company estimates the following costs and shoe production for the upcoming year:
Estimated total overhead = $1,250,000
Estimated number of shoes = 4,000,000
Actual overhead = $1,350,000
Actual number of shoes = 4,100,000
What is the predetermined overhead rate?

A) $0.313
B) $0.375
C) $0.343
D) $0.329

2. What is the impact on costs as sales volume decreases?

A) Total variable costs will increase in direct proportion
B) Total fixed costs will increase in direct proportion
C) Total fixed costs will decrease in direct proportion
D) Total variable costs will decrease in direct proportion

3. What are the costs associated with two or more business units called?

A) Variable costs
B) Direct costs
C) Indirect costs
D) Product costs

4. Which ratio provides a measure of how well a company turns sales into profits?

A) Return on expenses
B) Return on profit
C) Return on costs
D) Return on sales

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

Solutions: