[jeff]

Guess I’ll kick it off!

Scheduled to take BEC on 4/19. It’s my last test so I’m putting as much study time in as I can. If I pass I get promoted, if I don’t pass I don’t get promoted, so the pressure is on!!

Good luck to everyone taking BEC this quarter!

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

[foreseeableCPA]

My major in college was Econ with an emphasis in Accounting so the Econ chapter wasnt too bad for me. I'll be more than willing to try to explain the answers to any questions you guys may have regarding Economics. Sunday Funday!

CPA - Class of 2013
CIA - Class of 2016

[so1913]

Ok with this question, I found answer choice “D” to be humorous. I don't recall seeing an answer choice quite like this on the exam before lol.

You purchased a preferred stock that pays a $3 annual dividend. When you bought the stock the required rate of return was 10%. You sold the stock when the required rate of return was 8%.

A You made a profit on the transaction.

B You lost money on the transaction.

C You broke even.

D You are not sure what happened to you.

AUD - 90 Pass
REG - 70,61,81 Pass DONE DONE DOOOOONNEEE!!!!!!!!
BEC - 79 - Pass
FAR - 70,82 - Pass

[Jade CPA-to-be]

@bcjasper, thank you for bringing up this question.

question CPA 05781 if you are using becker, it says Wren sells 4 units of A for every unit of B, becker gives equation as A=4B, which i think it is wrong, it should be 4A =B

anyone else with me?

CPA Licensed in California- Class of 2013

[Jade CPA-to-be]

also if anyone can explain this question for me,

CPA – 03972

the use of activity -based costing normally results in

A. substantially greater unit costs for low-volume products than is reported by traditional product costing.

B. substantially lower unit costs for low-volume products than is reported by traditional product costing.

anwer is A. but why? i think since using ABC method, low-volume products should be allocated less costs, therefore lower unit costs.

CPA Licensed in California- Class of 2013

[Anonymous]

Casey- Here is one of the questions:

Brewster Co. has the following financial information:

Fixed Cost $20,000

Variable Costs 60%

Sales Price $ 50

What sales are required for Brewster to achieve a 15% return on sales.

answer is 80,000 but I don't quite understand the equation they use to figure it out.

S-.6S-20000=.15S

If you could just explain, conceptually where they are getting this equation I think that would help.

[Anonymous]

Jade- I didn't get that one either, but I figured out how the explanation works and it makes perfect sense. So if you just set up the equation as 4B because your selling 4 products of A for every B, so your trying to solve to find how many products of B your going to sell and than extrapolate that to find A. If you don't do that, you wouldn't be able to determine how many products of A you sold.

Your other questions: Because when using ABC costing compared to absorption your allocating an equitable amount of overhead to the demands it places on each unit. So for example, say your producing two products (socks and basketballs) and you product a lot of basketballs but not very many socks, well if your using absorption costing, the basketballs are going to end up carrying a lot of overhead because your more than likely allocating it based upon machine hours or something general. If you were to switch to ABC you would potentially be looking at allocating it based upon a cost driver that reflects an equitable allocation basis so your allocating the same amount of overhead and your unit cost is going to be higher because the basketballs are not absorbing the majority of the overhead. That may or may not make sense…

[Anonymous]

Picture an Income Statement:

Sales 100% or 1.0Sales

<Variable Costs> 60% or 0.6Sales

---

Contribution Margin 40% or 0.4Sales

<Fixed Costs> $20,000

---

Operating Income 15% or .15Sales

[Anonymous]

So based on that, Fixed Costs must be 25% of Sales.

$20,000/0.25Sales = $80,000 = Sales

[Jade CPA-to-be]

thanks, it does make sense.

i guess i can think this way based on the example you give. let us say a company produces 1000 basketballs and only10 socks. if using traditional costing based on labor hours, OH allocated to socks may be very little since only 10 socks produced. but if using ABC method based on the consumption of resources, OH allocated to socks may be increased if more activities like handing or design costs can be assigned to producing socks. thus, unit cost for socks is greater under ABC than traditional costing. hope this is right.

thanks so much for your help

CPA Licensed in California- Class of 2013

[MintsRGood]

It's official…I have gone into full tilt panic mode courtesy of Capital Budgeting. I'm not crazy about the presentation of this info in my Wiley text, it's too wordy and not enough examples for my taste, and while I do appreciate that Wiley gives you difficult questions to practice with it is NOT helping me get the basics tight before I have to mess with these formulas algebraically! All I can think of right now is that there are only 19 days until my test, I have 4 more modules to cover, and I'm getting hysterical because Wiley wants me to compute the standard deviation of expected returns!!!!!!!! Is this really necessary???? YIKES!!!!!!!! Hopefully I can grind out the last 30 questions in the module and get the hell out of this topic!!!!!

I know that with proper planning (I use ELL and Ninja Audio to hit 4.5 hours per day and 8 hours per day on weekends) I can cover my last 4 topics (Financial Management, Performance Measures, Cost Measurement, Planning/Control/Analysis) in the next 1.5 weeks and spend the final 1.5 weeks grinding out and tightening up the MCQS on all topics…but I'm starting to freak out a little!!!!

REG: 75 DONE 🙂
AUD: 61, 71, 68, 92 DONE 🙂
BEC: 76 DONE 🙂
FAR: 72, 74, 79 DONE 🙂
Licensed Michigan CPA 🙂
-Some people dream of success...others wake up and work hard for it!!!
-The cowards never start and the weak die along the way!
-You better work, b***h!
-Only those who dare to fail greatly can ever achieve greatly.-JFK

[Anonymous]

Mints- PULL IT TOGETHER! No I'm just kidding, I am still laughing over your interpretation of the IT material. But seriously, what is this standard deviation you speak of? Becker does not cover any stnd dev on Capital Management. In fact the only statistical coverage really is in B2 on regression analysis. I know there was one practice question on the 2013 release, but the Standard Dev was already calculated and it was simply applying a ratio to it. I was good at stats when I took it years ago, but if I had to do a probability type question on the Exam.. Stick a fork in me, because I'll be done.

[Anonymous]

Oh and Casey.. thats just what I needed. I don't know why I was struggling so much with it but your income statement interpretation made total sense. Thanks!

[Anonymous]

You got this, Mints. Take a short break and give yourself a chance to unwind, then come back and grind it out.

If you have specific questions, post them here and someone will be able to break it down.

[MintsRGood]

@bcjasper09 Too funny…because it's TRUE!!!! I do need to get it together! Wiley sometimes can technical you to DEATH and if Becker isn't suggesting that I know how to compute standard deviation then maybe this is just typical Wiley overkill and I should know how to interpret standard deviation but not compute it! I'm gonna go with that, so thank you for helping to check my irrational panic! PS I'm glad you got a kick out of my IT rant, I was highly annoyed with the topic and figured it may be good for a laugh! 🙂

Overall I still need a tune up on NPV, Payback Period, ARR, IRR etc. but at least I made it through the module and relevant MCQS and can adress that section again in final review. I just have to keep moving through all the material and not get stuck in the mud on any one particular topic! 🙂

Good Luck everyone!!!!!!! 🙂

REG: 75 DONE 🙂
AUD: 61, 71, 68, 92 DONE 🙂
BEC: 76 DONE 🙂
FAR: 72, 74, 79 DONE 🙂
Licensed Michigan CPA 🙂
-Some people dream of success...others wake up and work hard for it!!!
-The cowards never start and the weak die along the way!
-You better work, b***h!
-Only those who dare to fail greatly can ever achieve greatly.-JFK

[MintsRGood]

Thank you Casey!!!!!! I'm going to my Mom's house for dinner so I'll have a glass of wine, chill out, and hit it hard again after dinner! 🙂

REG: 75 DONE 🙂
AUD: 61, 71, 68, 92 DONE 🙂
BEC: 76 DONE 🙂
FAR: 72, 74, 79 DONE 🙂
Licensed Michigan CPA 🙂
-Some people dream of success...others wake up and work hard for it!!!
-The cowards never start and the weak die along the way!
-You better work, b***h!
-Only those who dare to fail greatly can ever achieve greatly.-JFK

[Author]

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