Hints for Final Exam in Mgt. 77b (Germain's class)  You may work with anyone you want to develop answers or study hints for these questions, and you may bring the materials you develop to the final exam.

 1.      Be able to tell how a particular accounting approach does or does not provide value to a company.  For example, if I give you two different methods for presenting information, you should be able to build a good argument for why one of them will provide more value than the other.  Compare a contribution approach to a net profit approach for product lines and see if you can tell why one provides more value than the other.

 2.      Be very comfortable with computing breakeven for companies like we did with Dynatronics.  You must be able to give good reasons for why you classified costs as fixed or variable and why you had to make approximations in some cases.

 3.      There will be a question on company bonus plans, so think through the important issues here.  These same issues are related to decentralization and how you organize companies.

 4.      Know how to compute the cash margin for a company and how to compute cash from operations.  Be able to compute a cash gap and explain the importance of managing the cash gap.

 5.      I will have some type of question about Southwest Airlines, so be prepared for some form of financial analysis for this company.  You can refer to all the analyses we did in class on the company for examples of the types of analyses I might ask for.

 6.      What lessons did you learn from the Industrial Grinders case?

 7.      Be able to tell how to use the mix, volume and price variances discussed in the Midwest Ice Cream case.

 8.      Know how to do break-even calculations for a company and how to read a CVP graph.  I gave you a spreadsheet that does CVP graphs, so I suggest you use it to practice changing the variables that you use to compute a break-even chart.

 9.      Know how to explain how responsibility accounting concepts increase the value of a firm.  Be able to give a specific example of how relating expenses and revenues to an individual manager causes company profits to increase.

 10.  Be able to explain in rational economic terms why marginal cost is better than average cost for decision making.

 11.  Explain why company managers decide to make labor a fixed cost in some cases and a variable cost in other cases.

12. Know how the parts of the financial statements fit together for the preparation of pro forma financial statements.

13. Be able to compute the cash flows for a proposed project from a set of financials for the project. Example: Harris Seafoods.