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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. Which overhead cost is associated with batch-level activities?

A) Factory insurance
B) Machine setups
C) Property taxes
D) Product engineering wages

2. The following list provides partial financial information for a company.
Current assets = $36,543
Total assets = $58,719
Current liabilities = $24,824
Total liabilities = $48,561
Stockholders' equity = $10,158
Sales = $46,997
Net income = $3,761
Market value of equity = $41,316
What is the current ratio for this company?

A) 4.78
B) 1.47
C) 1.38
D) 0.83

3. Which source of cash is the best indicator of a firm's viability as an ongoing concern?

A) Cash from financing activities
B) Cash from investing activities
C) Cash from production activities
D) Cash from operating activities

4. 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) $0.343
B) $0.329
C) $0.375
D) $0.313

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

Solutions: