BEC Study Group – Q1 2018 - Page 11

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  • January 19, 2018 at 4:01 pm #1695084
    lurking_CPA
    Participant

    I want to say I also had so much anxiety… I passed the CPA Ethics for my state California last night after sitting for BEC because I just couldn't go to sleep. I slept for a few hours before coming to work today and I'm just a wreck of anxiety about this final score. My FAR expires in May and I really don't want to have to fight for a passing score at the last possible window for BEC. So far third time has been “the charm” for every exam. I hope the pattern continues.

    January 20, 2018 at 9:43 am #1695220
    Recked
    Participant

    Good day all. Joining the BEC mix.
    Testing in ~4 weeks, started on it yesterday.

    January 21, 2018 at 6:41 pm #1695606
    Maura Lennie
    Member

    Looking to take BEC within the Next 2 weeks. This is a retake – 67 (before April 2017), 58 – August 2017 and retake – I'm using Becker now – I'm about to start B5, and I'm wondering if I should get ninja. I really don't want to take this exam again!

    January 22, 2018 at 7:35 am #1695709
    CS
    Participant

    @ itagain

    I'm using Roger as my primary course but have NINJA & Gleim testbanks (I switch between them and then hammer them out during the last few weeks).

    I gotta say, NINJA's BEC testbank is by far the most difficult (I had it for FAR & AUD). Roger's MCQs are decent, and Gleim has the reputation of being the monster, but for BEC, I'm trending way higher on Gleim than NINJA. I did a search and found that many candidates had the same experience specifically with NINJA BEC and its level of difficulty, so it's not just me. That being said, it would probably give you the final push to pass the exam, good luck!

    January 22, 2018 at 9:57 am #1695772
    chitown87
    Participant

    Good morning all,

    Does someone have an easy to understand explanation of the concepts of overapplied vs underapplied overhead? Everytime I think I have a handle on it, I turn out to be wrong haha.

    Is applied overhead the same concept as budgeted overhead?

    January 22, 2018 at 10:50 am #1695796
    jenpen
    Participant

    Let me see if I can help break it down in a simple way – in the budget there is overhead anticipated. The actual applied overhead is what actually occurred, and then the under/over is the difference between the budget and the actual.

    If the budget is lower than the actual, it's underapplied because not enough was budgeted. If the budget is higher than the actual, it's overapplied because too much was budgeted.

    AUD - 56 - 68 - 61 - 9/8/16
    REG - 75
    FAR - 7/15/16
    BEC - TBD

    Wiley CPAexcel and NINJA 10 Point Combo

    January 22, 2018 at 3:55 pm #1695961
    jmiller13
    Participant

    So… I took my BEC retake this morning and all I can say is wow. First testlet was ridiculous second testlet was a little better. A few of the Sims were out of left field and WC questions were really vague. On top of that the exam shut down once during the sims and again while I was on my last WC. That is so aggravating when you lose your train of thought while waiting on the system to reboot. This time was way harder than the first try when I only missed by two points so I’m quite confident I will be taking it and AUD again (losing AUD credit 1/25) in the spring.

    January 22, 2018 at 8:55 pm #1696105
    chitown87
    Participant

    @Jennifer

    Thank you for the reply. I follow what you are saying, but to clarify, are you saying actual overhead and applied overhead are the same thing? You said “he actual applied overhead is what actually occurred.”

    This is a question I run into on Surgent that left me a bit confused:

    “Mason Company uses a job order cost system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct-labor dollars. The rate for the current year is 200% of direct-labor dollars. This rate was calculated last December and will be used throughout the current year. Mason had one job, No. 150, in process on August 1 with raw materials costs of $2,000 and direct-labor costs of $3,000. During August, raw materials and direct labor added to jobs were as follows:

    No. 150 No. 151 No. 152
    ——- ——- ——-
    Raw materials $ X $4,000 $1,000
    Direct labor 1,500 5,000 2,500

    Actual manufacturing overhead for the month of August was $20,000. During the month, Mason completed Job Nos. 150 and 151. For August, manufacturing overhead was:”

    The answer is underapplied by $2,000, and I can follow the calculations as to why, but this question gives me the impression that actual overhead is NOT applied overhead. So I guess that's where I'm confused. I also am wondering what happens to the amount of overhead that is under/over applied?

    January 22, 2018 at 9:38 pm #1696120
    chitown87
    Participant

    One more question for anyone who might know..the following is a question from the AICPA sample test for BEC:

    “Standard deviation and expected return information for four investments selling for the same price is as follows:

    Investment A has standard deviation of 25% and expected return of 20%.
    Investment B has standard deviation of 20% and expected return of 18%.
    Investment C has standard deviation of 12% and expected return of 8%.
    Investment D has standard deviation of 10% and expected return of 10%.

    Which investment is the best choice in terms of the risk/return relationship?”

    Can anyone explain why D is the correct choice? Is there a calculation I can do if I see a problem like this?

    January 23, 2018 at 11:12 am #1699797
    Bourne
    Participant

    Not studying for BEC yet but here's my answer:

    Investment A can be a 45% return or a -5% return.
    B 38% or -2%
    C 20% or -4%
    D 20% or 0%.

    D you're not losing any money and you're risking a 10% profit for a 0% loss. With the amount of risk you're taking on in investment D (10% st. dev.) a 10% return is fair.

    January 23, 2018 at 2:32 pm #1701156
    Ben
    Participant

    @chitown87

    Applied OH is based on the pre-determined OH rate, in this case 200% of direct labor dollars (usually it will be direct labor hours or machine hours). ($9,000 x 200% = 18,000). 18,000 would be booked to WIP.

    Actual OH is the amount actually incurred, 20,000. Applied is less than actual, so it is underapplied.

    Budgeted OH is not relevant determining over/under applied OH.

    January 23, 2018 at 2:43 pm #1701163
    chitown87
    Participant

    @Ben

    Thank you. The pre-determined OH rate is essentially the budgeted rate, right?

    And what happens to the $2,000 of actual OH above the applied amount?

    January 23, 2018 at 2:54 pm #1701168
    Ben
    Participant

    @chitown87

    I believe the budgeted rate has nothing to do with pre-determined OH rate. Pre-determined OH rate is calculated using a standard rate and actual quantity. Standard rate was 200% of direct labor dollars, actual quantity was direct labor dollars in Aug. Budgeted OH should be ignored, it is not relevant. Budgeted does not mean applied, it's the amount management budgets for the periord, not necessarily based on the pre-determined rate.

    The $2,000 actual OH over the applied OH would be adjusted to increase COGS, so the expense equals actual costs.

    January 23, 2018 at 3:38 pm #1701198
    Tim
    Participant

    @chitown87

    You divide the standard deviation by the expected return. The lowest number is the optimal choice.

    January 23, 2018 at 3:54 pm #1701207
    chitown87
    Participant

    @Tim

    Thank you! I was playing around with it earlier today and noticed that dividing the expected return by the standard deviation gave option D the highest number and thought maybe that was why. So your explanation makes sense.

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