WGU Updated Accounting-for-Decision-Makers Exam Questions and Answers by arley

The correct answer is A. $0.313 . A predetermined overhead rate is calculated at the beginning of the period using estimated overhead costs and the estimated amount of the allocation base. OpenStax states that the rate is found by dividing estimated manufacturing overhead by the estimated activity base.

The formula is:

Predetermined overhead rate = Estimated total overhead / Estimated allocation base

Using the numbers in the question:

$1,250,000 / 4,000,000 shoes = $0.3125 per shoe

Rounded to three decimal places, that equals $0.313 per shoe .

The actual overhead and actual number of shoes produced are not used to compute the predetermined rate. Those figures are used later when applying overhead or analyzing overapplied and underapplied overhead. That is why choices based on actual data are incorrect.

Option B, $0.329 , comes from dividing actual overhead by actual production, but that is an actual rate, not the predetermined one asked for here. Since predetermined overhead always relies on estimates made in advance, the correct answer is $0.313 , which makes Option A correct.

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.

The correct answer is C. Raw materials cost . A cost incurred as part of the production process is a product cost , and raw materials are one of the most direct examples. In manufacturing, raw materials are inputs physically used to create finished goods, so they are clearly part of production. Manufacturing cost guidance consistently identifies direct materials, direct labor, and manufacturing overhead as production-related costs.

Option A, sunk cost , refers to a past cost that has already been incurred and cannot be changed, so it is a decision-making concept rather than a specific production input. Option B, opportunity cost , represents the benefit forgone by choosing one alternative over another, not an actual recorded production cost. Option D, period cost , refers to costs such as selling and administrative expenses that are expensed in the period incurred and are not part of the manufacturing process. Because raw materials are directly consumed in producing goods, they are the clearest example of a cost incurred as part of production. Therefore, the correct answer is Raw materials cost , making Option C correct.

The correct answer is D. $152,500 . To find October cash payments , include the portions of purchases paid in October from three different months:

15% of August purchases

35% of September purchases

50% of October purchases

Now calculate each amount:

15% of August ($75,000) = $11,250

35% of September ($225,000) = $78,750

50% of October ($125,000) = $62,500

Now add them:

$11,250 + $78,750 + $62,500 = $152,500

This is the total forecasted cash payment for October under the company’s payment pattern. Budgeted cash disbursement questions often require tracking the timing of payments across multiple months, not just the current month’s purchases.

Option B includes only 50% of October purchases. Option C includes only 35% of September purchases. Option A includes only part of the earlier-month carryover. Since October cash payments must include all three applicable portions, the correct total is $152,500 , making Option D the right answer.