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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) $24,750
C) $18,500
D) $25,050

2. The following cost-volume-profit graph shows revenues and costs at various levels of production.
How many units should this company sell each month to realize a profit?

A) 275
B) 250
C) 225
D) 100

3. A company manufactures and sells widgets. The following information is available:
* Total fixed costs per month are $300,000
* The variable cost per widget is $50
* Each widget sells for $100
How many widgets does the company need to sell each month to break even?

A) 4,500
B) 6,000
C) 3,000
D) 2,000

4. A company collects 20% of the credit sales in the month of sale and the rest is collected equally in the following two months. The company made the following credit sales:
January = $500,000
February = $420,000
March = $545,000
April = $550,000
May = $555,000
June = $567,000
July = $600,000
Which is the correct amount of cash collection in the month of September?

A) $625,000
B) $670,000
C) $624,000
D) $658,000

5. Which financial statement is used to determine a company's income and expenses for a specific period?

A) Balance sheet
B) Statement of cash flows
C) Statement of retained earnings
D) Income statement

Solutions: