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WGU Accounting for Decision Makers C213 VAC2 Sample Questions:

1. 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?

A) $27,300
B) $25,050
C) $24,750
D) $18,500

2. Which change occurred if the cost of goods sold moved from 76.8% to 72.6%?

A) Gross profit percentage increased by 4.2%
B) Net profit percentage decreased by 4.2%
C) Net profit percentage increased by 4.2%
D) Gross profit percentage decreased by 4.2%

3. A company has projected the following sales for the spring quarter of a year:
April = $300,000
May = $325,000
June = $375,000
Cash is used to pay for 65% of all sales. The remainder is on credit.
The pattern for credit receivables collections is as follows:
* Month of sale = 60%
* Month after sale = 30%
* Second month after sale = 10%
What are the projected cash sales for all three months of the spring quarter?

A) $105,000
B) $350,000
C) $195,000
D) $650,000

4. What would be the appropriate cost driver to allocate overhead for a call center?

A) Number of labor hours
B) Total sales dollars
C) Total material cost
D) Number of customer contacts

5. 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) 1.38
C) 0.83
D) 1.47

Solutions: