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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) $0.375
B) $0.313
C) $0.329
D) $0.343

2. Which balance sheet category reflects what a company owns that can be turned into cash or used to generate cash?

A) Revenues
B) Assets
C) Owners' equity
D) Liabilities

3. Which technique describes the practice of incurring debt but fully paying the debt over time?

A) Income smoothing
B) Liability deferral
C) Accounting management
D) Profit control

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

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

A) Activity-based costing systems are based on a single cost driver and traditional costing systems are based on multiple cost drivers
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 used with homogeneous products while traditional costing systems are used with heterogeneous products

Solutions: