[jeff]

I’ve had a few requests for April/May Study Groups…March will be here before you know it.

In order to take an early April exam, you should begin studying…now. 🙂

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

[mjp44]

The answer is C. $50,000 by the way. $200,000 – $150,000(breakeven)

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[NYCaccountant]

Only variable costs, don't include fixed costs. Remember fixed costs stay constant within the relevant range, but the variable costs will consistently go up or down. If I sold something for $2, variable costs of 1, no matter how many units I sale, I'll always be profitable. Now say I have fixed costs of 5,000, I now need to sell 5,000 units to breakeven.

FAR - 93
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AUD - 99!!!!!! CPA exam complete.

[mjp44]

@NYC thanks..i got it now

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[mratner]

Can someone please explain why Variable SGA is not included in this calculation.

Thanks

Selected information concerning the operations of a company for the year ended December 31 is as follows:

Units produced

20,000

Units sold

18,000

Direct materials used

$80,000

Direct labor incurred

$40,000

Fixed factory overhead

$50,000

Variable factory overhead

$24,000

Fixed selling and administrative expenses

$60,000

Variable selling and administrative expenses

$9,000

Work-in-process inventories at the beginning and end of the year were zero. What was the company's finished goods inventory cost at December 31 under the variable (direct) costing method?

a.

$17,000

b.

$14,400

c.

$23,900

d.

$19,400

Explanation

Choice “b” is correct.

BEC 4/7/2014
FAR 5/28/2014
AUD Sometime in Beg. of July
REG Sometime in End of August

[NYCaccountant]

Has anyone tried the 2013 released questions yet?

@mratner Because it's a period cost, not product. It would be below the line after gross profit.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[mratner]

@NYCaccountant is Variable SGA always a period cost? Throughout the Becker book it says that it is a product cost and on some MCQ it has the variable selling expenses included. Just confused as to when Variable SGA is included in product under variable. Absorption makes sense that all SGA is a period cost.

Also for 2013 released, They are buried in Becker review so I have seen all 40 released questions, plus did just the released questions this weekend. Seem pretty similar to other Becker questions.

BEC 4/7/2014
FAR 5/28/2014
AUD Sometime in Beg. of July
REG Sometime in End of August

[mjp44]

@mratner SG & A is always a period cost. I cant think of scenario where it would be a product cost

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If it's important to you, you will find a way. If it isn't, you will find an excuse.

[mjp44]

@mratner SG & A is always a period cost. I cant think of scenario where it would be a product cost

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[Anonymous]

Out of curiosity, how long after 4/15 does anyone plan on taking BEC? I figured I need at least one day off after the busy season before i can phathom studying. I already finished the review section with CPAexcel so I figured I would shoot for maybe 3-4 weeks of review and look to take it around 5/15. Anyone else looking to take it shortly after busy season?

[taxman89]

anyone else hate how about 75% of any BEC m/c Q is just extraneous bull $hit data that doesnt have anything to do with what is asked?

Aud-75 3x I knew i never liked you
Bec-77 1x being in the bubble is stressful
Reg-82 4x its not me its you...and no we cant be friends
Far-78 1x easiest section

[jeff]

Thursday BLITZ: Financial Management

hiya!

https://www.another71.com/ninja-blitz/

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

[NYCaccountant]

I have question regarding spoiled goods. I know the difference between abnormal and normal, but my question is in regards to allocating the production costs during the period. So if I produced 40,000 units and 1,000 were abnormal, do I divide the total product cost (300k) by 40,000 or 39,000? I'm think to divide the production costs by 40,000 to get cost per unit, than multiply that by 39,000 to get finished goods. The 1,000 abnormal goods will be multiplied by the same cost per unit, but expensed as a period cost. Assumed these units are scraped and not reworked.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[mratner]

@NYCaccountant Can you post the question example?

BEC 4/7/2014
FAR 5/28/2014
AUD Sometime in Beg. of July
REG Sometime in End of August

[NYCaccountant]

There really is no question to post. I'm just intrigued about it. Ummm I'll run through the questions within the test bank tonight and see if I can find one.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[mjp44]

Baby Frames, Inc. evaluates manufacturing overhead by using variance analysis. The following information applies to the month of May:

Actual Budgeted

Number of frames manufactured 19,000 20,000

Variable Overhead costs $ 4,100 $2 per direct labor hr

Fixed Overhead costs $22,000 ; $20,000; $1 per unit

Direct labor hours 2,100 hrs 0.1 hour per frame

What is the variable overhead efficiency variance?

a. $200 favorable.

b. $400 unfavorable.

c. $400 favorable.

d. $200 unfavorable.

I know that the efficiency variance is the Budgeted hours x std rate – Actual hrs x std rate. The answer explanation is : (19,000 frames x .1 hour per frame = 1,900 x $2/hr= $3,800) – (2,100 hours x 2/hour = $4,200) = Unfavorable variance of $400.

I dont understand why the 19,000 of actual frames produced is used in the variance. I thought you would use the 20,000 budgeted amount because the formula is budgeted units allowed x standard rate.

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[Author]

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