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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. Which organization establishes rules U.S. companies use to record and report accounting transactions?

A) Accounting Principles Board
B) Financial Accounting Standards Board
C) Internal Revenue Service
D) Securities and Exchange Commission

2. A company has three product lines and has historically used the traditional costing system to allocate overhead costs to each product line. Due to significant differences in the production processes for the three product lines, the company implemented an activity-based costing study and identified the activity-based cost for each product, as shown in the following table.
Product A
Product B
Product C
Traditional cost per unit
$558
$1,375
$1,211
Activity-based cost per unit
$675
$1,585
$1,350
Selling price per unit
$650
$1,450
$1,300
What do these data points reveal about the selling price of this company's products?

A) No change should be made to the selling price
B) The selling price for only Product B should increase
C) The selling price should increase for all three products
D) The selling price for only Products A and C should increase

3. What is an advantage of the indirect method of the cash flow statement?

A) Easy for a novice to decipher operating cash flow information
B) Easy to highlight the difference between direct and indirect costs
C) Easy to reconcile between net income and cash flows
D) Easy to avoid making mistakes because the method reveals indirect costs

4. Which role do ethical standards have in management accounting?

A) To prevent all unethical behavior of anyone the management accountant may work with
B) To provide the management accountant with the ability to work with only companies that follow strict ethical principles
C) To provide the management accountant with the ability to know whether a person will act ethically or not
D) To guide the resolution to possible ethical dilemmas that the managerial accountant may encounter

5. How are activity-based costing systems different from traditional costing systems?

A) Activity-based costing systems are used with homogeneous products while traditional costing systems are used with heterogeneous products
B) Activity-based costing systems require less time and expense to administer than traditional costing systems
C) Activity-based costing systems provide a more precise assignment of overhead costs when multiple products are manufactured than traditional costing systems do
D) Activity-based costing systems are based on a single cost driver and traditional costing systems are based on multiple cost drivers

Solutions: