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

2. Who does Sarbanes-Oxley apply to?

A) Publicly traded, wholly-owned subsidiaries of foreign companies doing business in the United States
B) Nonpublic companies in the United States
C) Publicly traded companies in the United States
D) Nonpublic wholly-owned subsidiaries of foreign companies doing business in the United States

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

4. What does management accounting present?

A) Information regarding a business's overall economic performance to help shareholders make decisions
B) Data to predict inconsistencies in finances to help users within a company make decisions
C) Information regarding the qualifications of managers to help shareholders make decisions
D) Detailed data regarding a business's overall economic performance to help outside stakeholders make decisions

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

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

Solutions: