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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. Which two item subtotals are included in a multi-step income statement?
Choose 2 answers.

A) Income from operations
B) Current liabilities
C) Total assets
D) Gross profit

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

3. What is true regarding the use of International Financial Reporting Standards (IFRS)?

A) IFRS are seldom used by non-U.S. companies
B) IFRS are required to be used by the Securities and Exchange Commission (SEC)
C) IFRS may be used instead of generally accepted accounting principles (GAAP) by any U.S.-based corporation
D) IFRS are commonly required to be used in Asia

4. A company prepared the following contribution margin income statement for the actual sale of 10,000 shoes:
Sales revenue = $600,000
Variable costs = $400,000
Contribution margin = $200,000
Less fixed costs = $150,000
Net income = $50,000
What would be the forecasted net income for the sale of 14,000 shoes based on the actual results above?

A) $230,000
B) $70,000
C) $130,000
D) $40,000

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

Solutions: