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WGU Accounting-for-Decision-Makers Exam Syllabus Topics:

SectionObjectives
Financial Accounting Fundamentals- Accounting Principles
  • 1. Accrual vs cash accounting
    • 2. Revenue recognition concepts
      - Financial Statements
      • 1. Income Statement analysis
        • 2. Balance Sheet structure
          • 3. Cash Flow Statement basics
            Managerial Accounting for Decision Making- Cost Behavior
            • 1. Mixed costs analysis
              • 2. Fixed vs variable costs
                - Cost-Volume-Profit Analysis
                • 1. Contribution margin concepts
                  • 2. Break-even analysis
                    - Budgeting and Planning
                    • 1. Forecasting and variance analysis
                      • 2. Operating budgets
                        Business Decision Support- Relevant Costing
                        • 1. Make or buy decisions
                          • 2. Differential cost analysis
                            - Performance Measurement
                            • 1. Responsibility accounting concepts
                              • 2. Financial ratios overview

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                                WGU Accounting for Decision Makers C213 VAC2 Sample Questions (Q23-Q28):

                                NEW QUESTION # 23
                                Which events represent financial information recorded in the accounting system of a business?

                                Answer: C

                                Explanation:
                                Accounting systems record business events that have already occurred , not events that may happen in the future and not the personal activities of owners. This is why Option B is correct. In financial accounting, recorded information must be based on identifiable, measurable, and supportable transactions or events, such as sales made, expenses incurred, assets purchased, liabilities created, or cash received and paid. Accounting information is primarily historical in nature, which improves reliability and allows users to evaluate what actually happened in the business.
                                Option A is incorrect because future business events are forecasts or estimates, not recorded transactions unless a present accounting event already exists, such as an accrued expense. Options C and D are also incorrect because personal events of the owners are not part of the business accounting records unless they directly affect the business entity, for example, owner investment or owner withdrawals. Under the business entity concept, the business is accounted for separately from its owners. Therefore, only completed business transactions and relevant economic events belonging to the business are recorded in the accounting system.


                                NEW QUESTION # 24
                                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?

                                Answer: C

                                Explanation:
                                The correct answer is C. The selling price should increase for all three products . The key point of activity- based costing (ABC) is that it often gives a more accurate view of overhead consumption than traditional costing, especially when products differ significantly in production complexity. ABC is designed to provide more precise overhead assignment by using multiple cost drivers.
                                Compare each product's selling price with its activity-based cost per unit :
                                Product A: Selling price $650, ABC cost $675 # underpriced by $25
                                Product B: Selling price $1,450, ABC cost $1,585 # underpriced by $135
                                Product C: Selling price $1,300, ABC cost $1,350 # underpriced by $50
                                All three products have selling prices below their ABC-based unit costs. That means each product appears to be priced too low if the ABC study more accurately reflects the resources consumed. Therefore, each product' s selling price should be reconsidered upward.
                                This question illustrates why companies adopt ABC in the first place: traditional costing can hide cross- subsidization among products, while ABC can reveal that multiple product lines are actually less profitable than previously believed. Therefore, Option C is correct.


                                NEW QUESTION # 25
                                A company budgeted the following purchases for raw materials:
                                January = $10,000
                                February = $20,000
                                March = $25,000
                                April = $22,000
                                May = $27,000
                                June = $30,000
                                July = $24,000
                                The company has a policy of paying for 40% of purchases in the month of the purchase, 35% in the month following the purchase, and 25% in the second month following the purchase.
                                What are the budgeted cash disbursements for May based on this information?

                                Answer: C

                                Explanation:
                                The correct answer is C. $25,050 . To calculate May cash disbursements , include payments from three months:
                                * 25% of March purchases
                                * 35% of April purchases
                                * 40% of May purchases
                                Now calculate each part:
                                25% of March ($25,000) = $6,250
                                35% of April ($22,000) = $7,700
                                40% of May ($27,000) = $10,800
                                Add them together:
                                $6,250 + $7,700 + $10,800 = $24,750
                                That math points to Option B , not Option C.
                                So the correct accounting answer based on the numbers provided is:answer: B The likely issue is that one of the answer choices in the source has a typo or the pasted numbers contain a small error. Under standard budgeting logic, May cash disbursements must include the unpaid portions of March and April plus the current-month payment on May purchases. Using the exact data shown, the total is
                                $24,750 . Therefore, the correct answer from the calculation is Option B , even though your list may contain a keyed inconsistency.


                                NEW QUESTION # 26
                                Which role do ethical standards have in management accounting?

                                Answer: A


                                NEW QUESTION # 27
                                What are two examples of product costs?
                                Choose 2 answers.

                                Answer: B,D

                                Explanation:
                                The correct answers are B. Direct labor and D. Raw materials . Product costs are the costs incurred to manufacture or acquire a product that will be sold. In a manufacturing setting, product costs normally include direct materials (raw materials) , direct labor , and manufacturing overhead . Corporate Finance Institute summarizes product costs as including direct material, direct labor, and manufacturing overhead.
                                Option A. Selling and administrative expenses is incorrect because those are period costs , not product costs. Option C. Period expenses is also incorrect for the same reason. Period costs are expensed in the period incurred and are not attached to inventory production. Lumen Learning similarly distinguishes product costs from period costs by explaining that product costs include direct materials, direct labor, and overhead, while selling and administrative expenses are period costs.
                                Because the question asks for two examples of costs directly associated with making a product, the best answers are Direct labor and Raw materials . These are core manufacturing inputs and become part of inventory until the goods are sold.


                                NEW QUESTION # 28
                                ......

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