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May 17, 2012 at 4:17 pm #170895

Anonymous
Inactive

I dont get it why these are the correct answers for the following two questions !!

First one :-

11. CPA

Co. has the following financial information:

Fixed costs $20,000

Variable costs 60%

Sales price $50

What amount of sales is required for Brewster to achieve a 15% return on sales?

a. $33,333

b. $50,000

c. $80,000

d. $133,333

Explanation

Choice “c” is correct.

2nd one :-

26. CPA

The stock of Fargo Co. is selling for $85. The next annual dividend is expected to be $4.25 and is

expected to grow at a rate of 7%. The corporate tax rate is 30%. What percentage represents the firm’s

cost of common equity?

a. 12.0%.

b. 8.4%.

c. 7.0%.

d. 5.0%.

Explanation

Choice “a” is correct.

Please help !!

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May 19, 2012 at 11:30 pm #345122

Shay
Member

@cyn637 All these questions were included in Becker 2012. so I didn't really feel challenged. But I hope question like that are on REAL exam. I guess, only reason they released these question because EVERYONE was getting them correct..lol…

May 20, 2012 at 12:26 am #345123

Anonymous
Inactive

I agree with you Shay. I hope the questions are similiar. I noticed that the document stated that those questions were ranked in the medium-difficult category so I hope the exam questions are similiar or “easier”. We can only pray and hope 🙂 When is your exam Shay??

May 20, 2012 at 6:13 am #345124

wendy12x12
Member

Just my $.02…

That first FC/VC question seems a lot easier (to me) solved by saying:

Sales = FC + VC (60% of sales) + Profit (15% of sales)

X = 20,000 + .60X + .15X

.25X = 20,000

X = 80,000

There's no unit calculation or anything needed. I know this is an extension of a break-even formula question, but it's easier (in my mind) to frame this like a basic word problem in algebra. You could do this whether you know the actual formula or not.

The only business thing one really needs to know here is that when they say “Variable costs 60%”, they mean that VC are 60% of the selling price (and not 60% of the fixed price).

FAR: 11/26 81!! Thank you Prof. Hoyle & cpareviewforfree!
AUD: 2/26 73*, 4/20 66 (AICPA approved free re-do: 8/12--waiting)
BEC: 1/15 82!! Wiley & cpareviewforfree
REG: 5/13 66, 7/22--waiting!
(exclamation points due to the complete surprise of passing)
*(left questions unanswered by accident) :o(

May 20, 2012 at 4:28 pm #345125

Shay
Member

@cyn637..FRiidayyy

I re-took practice # 1 (91,95,87) after two wks taking it first time I did not review it. I dont like these high scores, because I think I might have memorized the answer. One of the NPV problems I knew the answer, but I wanted to solve it to get the correct answer, but I could not because of the stupid Becker Calculator. Thats going to be BIG problem for me..any suggestion?

One or two question that I got wrong were not in Becker, but easy type. Do you think I might be in trouble, if I memorized ALL the question/answered from Becker. I haven't prepared my WC. I just think it all depends on if you know it or not.

May 20, 2012 at 4:41 pm #345126

posty
Member

Can someone please help on this one…

31. CPA

Johnson Co., distributor of candles, has reported the following budget assumptions for year 1: No change

in candles inventory level; cash disbursement to candle manufacturer, $300,000; target accounts payable

ending balance for year 1 is 150% of accounts payable beginning balance; and sales price is set at a

markup of 20% of candle purchase price. The candle manufacturer is Johnson's only vendor, and all

purchases are made on credit. The accounts payable has a balance of $100,000 at the beginning of year

1. What is the budgeted gross margin for year 1?

a. $60,000

b. $70,000

c. $75,000

d. $87,500

Explanation

Choice “b” is correct.

Thanks!

FAR - 78 (10/3/11)
AUD - 83 (11/28/11)
REG - 70 (4/7/12), 84 (7/31/12)
BEC - 75! (5/31/12)
Ethics - 98

DONE

May 20, 2012 at 4:46 pm #345127

posty
Member

Nevermind, I just got it…

+100,000 Beg A/P

-300,000 Cash Disbursements

+350,000 Purchases (Plug)

=150,000 End A/P (100,000 * 1.5 = 150,000)

350,000 * 1.2 = 420,000 Sales

420,000 – 350,000 = 70,000 Gross Margin

FAR - 78 (10/3/11)
AUD - 83 (11/28/11)
REG - 70 (4/7/12), 84 (7/31/12)
BEC - 75! (5/31/12)
Ethics - 98

DONE

May 20, 2012 at 4:59 pm #345128

posty
Member

Here's one that I really can't figure out…

29. CPA

A ceramics manufacturer sold cups last year for $7.50 each. Variable costs of manufacturing were $2.25

per unit. The company needed to sell 20,000 cups to break even. Net income was $5,040. This year,

the company expects the following changes: sales price per cup to be $9.00; variable manufacturing

costs to increase 33.3%; fixed costs to increase 10%; and the income tax rate to remain at 40%. Sales in

the coming year are expected to exceed last year's sales by 1,000 units. How many units does the

company expect to sell this year?

a. 21,000

b. 21,600

c. 21,960

d. 22,600

Explanation

Choice “d” is correct.

Your help is much appreciated.

FAR - 78 (10/3/11)
AUD - 83 (11/28/11)
REG - 70 (4/7/12), 84 (7/31/12)
BEC - 75! (5/31/12)
Ethics - 98

DONE

May 20, 2012 at 6:30 pm #345129

bighitter56
Participant

Solve at the break even point of 20,000 units to calculate fixed costs. Then take the after tax net income of 5,040 and calculate what pretax income and tax expense must be to yield after tax income of 5,040. Then solve algebraically for the amount of units sold in the prior year to yield after tax income of 5,040. Lastly, add 1,000 to that number because the problem states unit sales are expected to exceed last years by 1,000.

BEC- 86
AUD- 96
REG- 83
FAR- soon hopefully

Using Wiley CPA Review Books and 2012 Wiley Online Test Bank
MBA in Finance & Strategy

May 20, 2012 at 8:15 pm #345130

Shay
Member

@bighitter56

I thought question was asking for [strong]this year[/strong] sales, not last year?

basically I was doing FC==$105,000 x 1.10% ==$115,500 + $8400 (before-tax income)== $123,900 / 6 (CM/ unit) == 20,650 units.

than add 1000 units to get 21,650 units. Its not even an option…

May 20, 2012 at 9:28 pm #345131

Anonymous
Inactive

@Shay:

In all honesty, I don't think you have much to worry about. You put in the time and you learned to solve practically every problem. Even if you don't understand the concept, you may remember how to solve it. This is your first exam, right? That's whats scary. You don't know what to expect. For all the other exams, I feel like becker over-prepares you. I thought the Becker exams were a lot harder than the actual exam (which is GREAT). Just keep at it with the calculator. you won't have any other option so you HAVE to get use the calculator. i've been using my Ti-calculator, but for this last 2 weeks of studying, i've put it away. now i just use the becker calculator. YOU WILL BE FINE!!! i'm sure of it :))

May 20, 2012 at 9:37 pm #345132

Shay
Member

@cyn637

thanks for the motivation. Yea it is my first exam, and I am scared. I just finished 2012 released questions. they were mostly easy. The ones I got wrong, because I made dumb mistakes by not reading complete questions. I got 13 wrongs out of 41. which is 68%. I wont let that judge me.

I am scared that I prepared myself for the hard exam, but if exam turned out to be asking easy question, I might just an answer choice to easy and end up choosing the wrong answer.

I have done pretty much everything by now. I just dont want to wait few more days, maybe I might forget til the exam. so I am just reading now.

May 20, 2012 at 10:46 pm #345133

Anonymous
Inactive

@ shay

You remind me of me when i first took the exam. I was so overwhelmed and scared, but it's mostly just because you don't know what to expect. Once you get a few questions out of the way, you will relax. Just budget your time, stay focus and don't assume. Sometimes i thought to myself “are they serious? was that really a question? it was so easy. Oh no, what if it was a trick question”, but then i think maybe i just prepared better and that's why i thought it was easy. i don't know if that makes sense to you now, but when you take your first exam, you will understand what I am talking about. Don't underestimate it, but don't stress out.

The week before the exam i re-do all the questions i marked in becker, i read the outline, and i go over the sections that i still don't understand. Oh, and there is a thing on this blog to wear red underwear the day of the exam. I don't know how it came up, but I'm very superstitious. lol! I wear the same clothes and I always wear this necklace. It's brought me luck so far…let's hope it does it again 🙂 Good luck!!!!!

May 20, 2012 at 10:58 pm #345134

Shay
Member

@cyn637

that is exactly what I say “are they serious? was that really a question? it was so easy. Oh no, what if it was a trick question?”…so funny..

I usually wear something new when its a special day….

May 24, 2012 at 12:57 pm #345135

ppierce
Participant

Seems like they selected some realy tough ones for this release. They're usually the cake questions.

FAR 80
REG 76
AUD 85
BEC 85
Ethics 98
DONE!!!!!!!!!!!!!!!!!!!!

May 24, 2012 at 1:56 pm #345136

Anonymous
Inactive

Guys,

The 2012 MCQs are harder than usual. The good thing is that what they rate “difficult” (from 21-40) seem to be pretty basic. I could not solve the BE one, so thank you for the solution. Shay, it seems like you're in great shape for this exam.

BEC seems to be a strange creature with so many topics and with only 72 MCQs. I really hope the exams are not heavy on just one specific topic.

Good Luck everyone…
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