Questions related to the mid-term exam

I have gathered the following questions from the students and TAs. I will add them as I
get more of them. Please check CANVAS for latest updates

(1) Do the lecture slides contain all the testable material? Yes.

(2) Will self-reading and homework exercises be testable? Yes. If you already
understood the lecture slides that I covered, the self-readings elaborate on what you already
know. But if you find that you are short of time, concentrate on the lecture notes that I
covered and make sure you do all tutorial questions.

(3) Will the materials not mentioned in the lecture slides but are there in the
textbook, be testable? Unless I specifically mention in class that certain sections are
excluded, the rest are included. Example: Chap 1 had a lot of details about new
manufacturing environment. I did not cover in class, so they are not included. I specifically
omitted the Appendix of chapter 6. In Chapter 8, there was a mention of volume variance in
the comprehensive example, I have not taught that topic, so it is excluded. You should use the
lecture notes as a starting point and then read the textbook for elaboration. Work through
tutorials.

(4) How many decimal places should I round off to?

This question comes up a lot. My advice is if you round up, round up to two decimal
places for percentages and for dollar amounts. For example,

Contribution margin ratio = $697,321 $2,000,000 = 34.87% (actual number in

calculator is 0.3486605. You should not round up to 35%, but to 34.87%)

Break-even in sales = $1,014,000 0.3487 = $2,907,943.79 (rounded at this

point)

However, if you did not round up the percentage to 34.87% (that is, you left the
number as it is in your calculator, but wrote down rounded to 2 decimal places for the
answer booklet), and then round up only in the final solution, you will get
$2,908,273.23.

BOTH ANSWERS ARE ACCEPTABLE.

(5) Will I be required to do the CVP graph in the exam?

No, you will not be required to graph it, but you have to understand the graph.

(6) What is the meaning of reconcile? E.g. P8-40B: reconcile the year to year
differences in the net income under the absorption costing and variable costing methods
Reconciliation means that you are required to tally the two sets of numbers. Similar to
what you did in bank reconciliation. So you compute the differences and then account for the
differences.