Accounting 3200 Midterm Exam
Questions #1, 6 and 9 are SIX points each. Questions #2 and 7 are FIVE points each. Question #3 is TEN points.
Questions #4 and 5 are EIGHT points each. Question #8 is TWELVE points.
Question #10 is SIXTEEN points. Question #11 is EIGHTEEN points.
BE SURE TO SHOW ALL SUPPORTING COMPUTATIONS. NO COMPUTATIONS = NO POINTS IF ANSWER IS WRONG.
1) Describe management accounting and financial accounting. Managerial accounting is more for internal users. Internal users like CEO, CFO, Managers want accounting information for special purpose, the accounting information can be very detail, It is for future decisions. It doesn’t have to be written by GAAP. It …show more content…
a. What is the breakeven point in batteries?
b. What is the margin of safety, assuming sales total $60,000?
c. What is the breakeven level in batteries, assuming variable costs increase by 20%?
d. What is the breakeven level in batteries, assuming the selling price goes up by 10%, fixed manufacturing costs decline by 10%, and other fixed costs decline by $100?
a. N= Breakeven units
$30n-$20N- $10,000 - $8,000 =0
$10n-$18,000 = 0
N= $18,000/$10 = 1,800 batteries
b. Margin of safety = $60,000 – ($30 x 1,800)= $6,000
c. N= Breakeven units
$30n-$24n - $10,000 - $8,000=0
$6n- $18,000 = 0
N= $18,000/$6= 3,000 batteries
d. N= breakeven units
$33N - $20n - $9000 - $7,900 =0
$13N- $16,900 =0n = $ 16,900/$13 =1,300 batteries
6) Ballpark Concessions currently sells hot dogs. During a typical month, the stand reports a profit of $9,000 with sales of $50,000, fixed costs of $21,000, and variable costs of $0.64 per hotdog.
Next year, the company plans to start selling nachos for $3 per unit. Nachos will have a variable cost of $0.72 and new equipment and personnel to produce nachos will increase monthly fixed costs by $8,808. Initial sales of nachos should total 5,000 units. Most of the nacho sales are anticipated to come from current hot dog purchasers, therefore, monthly sales of hot dogs are expected to decline to $20,000.
After the first year of nacho sales, the company president believes that hot dog sales will