WGU C213 Accounting for Decision Makers 2023/ 2024 Exam | Questions and Verified Answers | A Grade
WGU C213 Accounting for Decision Makers
2023/ 2024 Exam | Questions and Verified
Answers | A Grade
Q: What is the cost to maintain Central Park?
Opportunity cost: How much rent could the City of New York get by subleasing some of the
Central Park land?
Q: Which of the following is NOT true of period costs?
Answer:
They may appear on the balance sheet as inventory.
Q: The Zig-Zag Company manufactures zippers for many clothing manufacturers. Costs for the
year were direct materials, $5,000; indirect materials, $1,600; direct labor, $12,000; and indirect
labor, $4,000. Additional expenses for the year were factory utilities $3,500; depreciation of
factory equipment, $1,300; advertising expense, $900; delivery expense on sales to customers,
$1,700; and property taxes on factory buildings, $5,200. Which amount is total manufacturing
costs for the year?
Answer:
Manufacturing Overhead:
$1,600 + $4,000 + $3,500 + $1,300 + $5,200 = $15,600
Total Manufacturing Costs:
$5,000 + $12,000 + $15,600 = $32,600
Q: When using activity-based costing, the cost associated with producing each batch is an
example of a:
Answer:
Cost pool
Q: Tracing overhead costs to activities involves dividing overhead costs into:
Answer:
Cost pools
Q: If activity-based costing is used, property taxes would be classified as a:
Answer:
Facility Support Activity
Q: For greater accuracy when using activity-based costing, management accountants should:
Answer:
Have a larger number of cost pools
Q: 5 Steps in ABC
Answer:
- Identify overhead cost activities in each process (Unit, Batch, Product Line, & Facility
Support) for an example electricity, - Analyze individual overhead costs in terms of cost activities (cost pools: how much OC is
created by Unit, Batch, Product Line, & Facility = the end results, - Identify measurable cost drivers (we need cost drivers which is a numerical measure that
reflects the amount of an overhead cost caused by a particular activity). Each overhead cost
activities need a cost driver. - Assign overhead (
- Use the ABC data to make decisions (
Q: Overhead cost associated with Unit (production process) Cost drivers
Answer:
. Normal wear-and-tear on machines
. Electricity
. Routine cleanup
. Routine maintenance
. Regular accounting
Q: Overhead cost with Batches (cost drivers) More batches = More overhead
Answer:
. Machine cleaning
. Machine setup, machine wear-and-tear
. Supervisor and inspector involvement
. Accounting reports
Q: Overhead cost with Product Line (cost drivers)
Answer:
. Product involvement
. Supervisor and inspector time
. Accounting reports
Q: An activity that affects a particular cost is a(n):
Answer:
Cost driver
Q: Overhead cost with Facility Support (No cost drivers)
Answer:
. Property taxes
. Security guards
. Routine regulatory reports
These OC do NOT increase regulars of production. It would not make sense to assign any of
these cost to the production.
Q: When assigning cost drivers to facility support activities, an appropriate cost driver would
be:
Answer:
No cost driver should be assigned
Q: Company A allocates one type of overhead cost on the basis of movement of materials. The
number of movement of materials processed is an example of a(n):
Answer:
Cost driver
Q: The traditional overhead cost allocation system assumes a simple relationship between
overall overhead cost and
Answer:
A single measure of activity
Q: A more accurate allocation of manufacturing overhead and product costing can take place
when costs are assigned on the basis of:
Answer:
Cost drivers
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