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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. A manufacturer produces three products A, B, and C.
The company uses the following information to determine activity rates for each pool.
Cost Pool
Costs
Total Activity
Pool 1
$300,000
20,000 hours
Pool 2
$20,000
500 pounds
Pool 3
$10,000
100 moves
Data concerning the three products appear in the following table.
Cost Driver
Product A
Product B
Product C
Number of hours
10,000
7,500
2,500
Number of pounds
150
250
100
Number of moves
20
40
50
What is the total amount of overhead applied to Product B?

A) $265,000
B) $112,500
C) $158,000
D) $126,500

2. The following cost-volume-profit graph shows revenues and costs at various levels of production.
How many units should this company sell each month to realize a profit?

A) 275
B) 250
C) 100
D) 225

3. Which overhead cost is associated with batch-level activities?

A) Machine setups
B) Product engineering wages
C) Property taxes
D) Factory insurance

4. In September, an airline using accrual accounting received cash from a round-trip ticket sold to a customer for
$1,500. The ticket allowed the customer to fly from Denver to Hawaii in October and from Hawaii back to Denver in November.
When should the airline recognize revenue?

A) Only in September
B) In September, October, and November
C) In October and November
D) Only in November

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

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

Solutions: