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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) $0.329
D) $0.343

2. 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) $126,500
B) $158,000
C) $265,000
D) $112,500

3. A company manufactures leather products and has recently switched to the activity-based costing (ABC) method. It needs to determine the cost of its leather wallets. The company is already aware of its DM and DL costs.
What is the first step to calculating the cost of the product?

A) Assign overhead costs
B) Identify overhead cost activities
C) Calculate G & A
D) Double check the DM & DL calculations

4. Which body regulates a certified public accounting firm's audit practices when the firm is auditing a large, publicly traded company?

A) The Public Company Accounting Oversight Board (PCAOB)
B) The Internal Revenue Service (IRS)
C) The Financial Accounting Standards Advisory Council (FASAC)
D) The Financial Accounting Standards Board (FASB)

5. Last year, X Corporation had sales of $500,000 and total expenses of $300,000. A manager of the company is entitled to get a sales commission of 10% of net profit.
What amount of sales commission is to be recognized at year-end?

A) $10,000
B) $30,000
C) $50,000
D) $20,000

Solutions: