ACCT 346 FINAL EXAM

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ACCT 346 Final Exam,
ACCT 346 Final Exam
Question 1.1. (TCO 1) How does managerial and financial accounting differ in terms of the amount of
detail presented and nonmonetary and monetary information? (Points : 15)
Question 2.2. (TCO 2) What is an indirect labor cost? What is an example of an indirect labor cost?
(Points : 15)
Question 3.3. (TCO 3) What is the difference between job order and process costing? (Points : 15)
Question 4.4. (TCO 4) What is a fixed cost? What is an example of a fixed cost? (Points : 15)
Page 2
Question 1.1. (TCO 5) What is full costing? How does it differ from variable costing? (Points : 15)
Question 2.2. (TCO 6) What is the first step in the cost allocation process? What is done in this step?
(Points : 15)
Question 3.3. (TCO 7) What is an incremental cost? What is an example of one? (Points : 15)
Question 4.4. (TCO 8) What is activity-based pricing? How is the price determined? (Points : 15)
Page 3
Question 1.1. (TCO 6) Name the steps in the ABC approach. Describe each of them. Which do you
think is the most important step? Why? (Points : 30)
Question 2.2. (TCO 7) Products Kappa and Sigma are joint products. The joint production cost of the
products is $800. Kappa has a market value of $450 at the split-off point. If Kappa is further
processed at an additional cost of $600, its market value is $1,400. Product Sigma has a market value
of $1,150 at the split-off point. If Product Sigma is further processed at an additional cost of $300, its
market value is $1,400. Using the relative sales value method, calculate the joint product cost that

would be allocated to Kappa and Sigma. How do you know if one of the products should be further
processed?
(Points : 30)
Question 3.3. (TCO 8) A company must incur annual fixed costs of $4,000,000 and variable costs of
$400 per unit and estimates that it can sell 40,000 pumps annually and marks up cost by 30 percent.
Using cost-plus pricing, what is the cost per unit and the price? What are advantages and
disadvantages of cost-plus pricing?(Points : 30)
Page 4
Question 1.1. (TCO 9) A project will require an initial investment of $250,000 and will return $50,000
each year for seven years. If taxes are ignored and the required rate of return is 9%, what is the
projects net present value? Based on this analysis, should the company proceed with the project?
(Points : 30)
Question 2.2. (TCO 10) Why does a company perform ratio analysis? What are the debt-related
ratios? Describe the formula for one debt-related ratio and explain how to interpret the ratio. (Points :
30)
Set 2
Page: 1 2 3 4
Question 1. Question : (TCO 1) Who are the users of managerial accounting information? How does
their use of accounting information differ from the users of financial accounting information?
Student Answer: The users of managerial accounting information are internal users rather than
external users which prefer financial accounting information. Internal users include company
managers that need the managerial accounting information for decision making purposes and for
planning and control.
Instructor Explanation: Textbook Chapter 1 Managerial accounting is directed at internal rather than
external users of accounting information. External users include investors, creditors, and government
agencies that use information to make investment, lending, and regulatory decisions. Internal
managers need information for planning, control, and decision making.
Points Received: 15 of 15
Comments:
Question 2. Question : (TCO 2) What is an indirect labor cost? What is an example of an indirect labor
cost?
Student Answer: An indirect labor cost includes all labor that are not directly traced to the items
produced. Examples of indirect labor costs include indirect labor such as executive salaries,
depreciation of equipment and property, and various utilities.
Instructor Explanation: Textbook Chapter 2 Indirect labor cost is the cost of labor that is not traced
directly to items produced. An example of an indirect labor cost is the cost of a production supervisor.
Points Received: 15 of 15
Comments:
Question 3. Question : (TCO 3) What is job-order costing? What type of company would us job-order
costing?
Student Answer: Job-order costing is a costing system, where each unique product or batch is a job
for which the company needs costing information. Therefore, it is necessary to trace manufacturing

costs to specific jobs. Manufacturing companies would use job-order costing but many service
companies such as hospitals or law-firms may also use job-order costing.
Instructor Explanation: Textbook Chapter 3 Job-order costing is where individual products or
batches are unique. An example would be the space shuttle.
Points Received: 15 of 15
Comments:
Question 4. Question : (TCO 4) What is a variable cost? What is an example of a variable cost?
Student Answer: A variable cost is a cost that fluctuates with the amount of products being made
and/or sold. Examples of variable costs include direct labor and direct materials.
Instructor Explanation: Textbook Chapter 4 Variable costs are costs th