[jeff]

@h0wdyus

Incorrect

The answer is B. Comparable sales.

“The use of comparable sales is not an income approach to valuation of a business, it is a market approach. Under the comparable sales approach, the value of a business is determined by comparing it to other entities with comparable characteristics for which the value is more readily determinable.”

This was a tricky one

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[M.O.D.]

I am swamped with trying to understand Gleim. I am putting BEC on the back burner until I get my NTS and studying FAR.

I trust the material in Gleim is sufficient, from my CMA test experience.

But if you want security, make a list of material necessary to know (like formulas, IT and COSO principles) and recreate it from memory on a daily basis. It is better than doing MCQs.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[GoVPI]

Virgil Corp. uses a standard cost system. In May, Virgil purchased and used 17,500 pounds of materials at a cost of $70,000. The materials usage variance was $2,500 unfavorable and the standard materials allowed for May production was 17,000 pounds. What was the materials price variance for May?

$17,500 favorable.

$17,500 unfavorable.

$15,000 favorable.

$15,000 unfavorable.

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[Zackrampage]

15k unfav? idk I suck at any questions dealing with calculations. Not sure why I am doin CPA LOL

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[GoVPI]

For BEC Wiley test bank.. practice exams.. I wonder why it weights the MCQ sections as 60% total (20% each) and 40% for the writing. I thought the writing only made up 15% of the entire exam. Strange

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[stoleway]

Answer is $17,500 favorable

From the questions above, you can generate some important figures even before you start solving the problem.

Actual Quantity=17500

Actual Price per Unit= $4

Direct material Efficiency Variance= -2500

Standard/Budgeted qty= 17000

Therefore

DMPV= AQP X (SP-AP

DMPV= 17500 X (SP- 4)

We don't know the value of SP but we know DMEV= -2500

DMEV= SP X (SQ-AQ)

-2500= SP X (17000 – 17500)

SP = $5

Finally insert $5 into the DMPV formular above

DMPV = 17500F

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Zackrampage]

Yeah…. had that question given me all of the info need for price variance and asked straight forward I would have known how to do it. Curveballs and math questions are the reason I am in my late 20's and still not a CPA.

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[stoleway]

@Zackrampage

Thats funny, just chill and work hard…I'm 30 and I'm not a CPA so I guess you're far ahead of me.

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Zackrampage]

Stole I took an approach that most people would never take so I cannot fail it cost too much. Not gonna elaborate too much but lets just say iIl got one on one assistance for BEC that costs more then all 4 parts of becker. So if I don't pass there isn't an answer. I study abou approx. 30 hrs a week only cuz work doesn't permit more. Anything in cost accounting, and % related I can't handle. I pray for more theory over math.

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[GoVPI]

If a firm purchases raw materials from its supplier on a 2/10, net 40, cash discount basis, the equivalent annual interest rate (using a 360-day year) of forgoing the cash discount and making payment on the 40th day is

2%

18.36%

24.49%

36.72%

2%/98% x 360/30 = 24.49%

Why is it 360/30<—- why 30?

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[Zackrampage]

@CPA14 I was afraid of these as someone said they don't frequently test them but 2 nights ago I taught myself the formula and it looks scary but is very easy. You take the days in yr given/ the diff between full days and discount days. I get headaches asking why. If a formula works for me I use it. Maybe not the best approach, but for me it works

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[stoleway]

@CPAin14

You need to apply the formula to a problem like this, the question is asking for the effective interest rate of not taking discount.

D%/1 – D% X Days in a year / Total Payment Period – Discount period

=.02/.98 x 360/ 40-10

=.0204 x 12

=24.48%

This kind of question requires that you know the formular even if you don't understand the concept.

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Zackrampage]

Essentially the answer to you questions is following part of the formula which says take the diff between full days and discount days would be 40 full period – 10 discount period = 30 days

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[Zackrampage]

@stoleway can they ask the same question but instead of foregoing you do take it? How would you do that?

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[GoVPI]

Ah yes thank you both, i just didn't know the formula! Thanks

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[GoVPI]

Heres one:

Black, Inc. employs a weighted-average method in its process costing system. Black’s work in process inventory on June 30 consists of 40,000 units. These units are 100% complete with respect to materials and 60% complete with respect to conversion costs. The equivalent unit costs are $5.00 for materials and $7.00 for conversion costs. What is the total cost of the June 30 work in process inventory?

$200,000

$288,000

$368,000

$480,000

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[Author]

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