ACC 121 Final Exam (2016SUM)
This Exam consists of fifteen (15) essay/short-answer questions. The first FOUR questions are REQUIRED;
you MUST answer each of these FOUR questions using complete sentences where needed, proper grammar,
and proper spelling. The next NINE question are Optional. You must answer SIX (6) out of these nine
questions, using complete sentences where needed, proper grammar, and proper spelling. The last TWO
questions are Optional, BONUS questions. MAKE SURE YOU WRITE LEGIBLY! In some cases, the
question may ask you to perform some sort of calculation. In these instances, you must show your complete
work (formulas used). Your answers to the exam questions must be thorough and complete. Incomplete
answers will receive LESS than full credit.
1. REQUIRED QUESTION: Explain in detail the differences between financial and
managerial accounting.
Financial accounting is the reporting of the financial information about a company to the
shareholders of the company to determine the profit and other reports on the fiscal year.
Managerial accounting focuses on the in depth goals of a company, like cutting down on cost and
other variables.
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2. REQUIRED QUESTION: Describe in detail the cost elements that constitute total
Product Cost.
The total product cost is the total overall cost that it takes to create or build that product. : There
are three main components of manufacturing cost: direct materials, direct labor, and factory
overhead costs. The cheaper these cost the more profit you can generate.
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3. REQUIRED QUESTION: Describe the changes that occur in Variable Cost per Unit
and Total Variable Cost as production output increases.
In variable cost per unit as the product output increases three main components of
manufacturing cost: direct materials, direct labor, and factory overhead costs all increase also.
With the total variable cost the price of the product will go up as output increase to cover the
cost amount to which the markup is added.
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4. REQUIRED QUESTION: Describe the changes that occur in Fixed Cost per Unit and
Total Fixed Cost as production output increases.
Fixed cost per unit will decrease when output increases because because the fixed cost is
spread over a larger number. Total fixed cost will remain the same because once a monthly
total fixed cost is set it does not change
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5. OPTIONAL QUESTION:
(A) Explain in detail the meaning of Contribution Margin.
(B) Robeson Company estimates it will produce and sell 3,000 units next month. Data on costs
follows:
Per unit costs:
Selling price…………………………………………………… $11.00
Variable manufacturing costs………………………………… $5.75
Variable selling costs…………………………………………. $0.25
Total costs:
Fixed manufacturing
costs……………………………………….
$4,500
Fixed selling costs……………………………………………… $ 500
REQUIRED :
i. What is the breakeven point in units?
ii. What is the breakeven point in sales dollars?
iii. What is the expected operating income for next month?
iv. What is the margin of safety in dollars?
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