[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. 🙂

AUD - 79
BEC - 80
FAR - 76
REG - 92

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

[Determined CPA]

MrsBing – I just got a question on the working capital release at the end of the project – don't forget to adjust to the PV. I'm sure you knew that, but just in case =)

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[scarletknight91]

@determinedcpa you discount it by a non-annuity discount factor right?

also i love how some of beckers answer descriptions have things like the following

“There are lots of better, more efficient and effective, means to distribute reports. Statement III is incorrect.” <— lots of better choices? gray area…….

FAR: PASSED
REG: PASSED
AUD: PASSED
BEC: PASSED

DONE

[taxman89]

i am one of the may 29thers and i am feeling ok. hitting solid 80s on never before seen MCQs so that good…..going to go over coso tomorrow listen to ninja audit IT a couple times to and from work and them do a couple practice WC and prolly a full practice exam.

AUD - 75
BEC - 77
FAR - 78
REG - 82

AUD: 61-67-75 (Thanks ninja aud)
BEC: 77
FAR: 78
REG:69-73-70-82

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

[scarletknight91]

The controller for Durham Skates is reviewing the production cost report for July. An analysis of direct material costs reflects an unfavorable flexible budget variance of $25. The plant manager believes this is excellent performance on a flexible budget for 5,000 units of direct material. However, the production supervisor is not pleased with this result as he claims to have saved $1,200 in material cost on actual production using 4,900 units of direct material. The standard material cost is $12 per unit. Actual material used for the month amounted to $60,025.

The actual average cost per unit for materials was:

a. $12.01

b. $12.25

c. $12.00

d. $12.24

so heres what i thought you had to do:

actual material used was 60,025, and with an unfavorable variance of 25, that means 60,000 was the flexible budget amount. and if the flexible budget was at 5000 units, then why isnt this 60025/5000=12.005 (12.01)?

the guy is “claiming” to have used 4900, but if the flexible budget is based on 5000 units, doesnt that imply that 5000 units were the actual units used? thats what a flexible budget is used for, to adjust to the actual units produced/used/whathaveyou

Explanation

Choice “b” is correct. If material cost for the month is $60,025 for 4,900 units, the average cost is $60,025 ÷ 4,900 = $12.25.

FAR: PASSED
REG: PASSED
AUD: PASSED
BEC: PASSED

DONE

[Anonymous]

I am taking the test on 29th as well. Reading here that people are working on WC's worries me coz I haven't practiced one WC. I just went over Becker video on how to tackle the WC's. Any tips on last minute review on WC?

[Anonymous]

scarletknight91 – As I understand it, the flexible budget amount is the budgeted quantity and budgeted quantity isn't used in overhead variance analysis (standard and actual are). Since they're asking for actual cost/unit you use actual numbers.

[Determined CPA]

scarletknight91 – I think you're right so I really don't have any input. I think the problem is saying that his ‘claim' is on the savings, not on the units used. The problem says ‘actual production using 4,900 units of direct material' so possibly the flexible budget wasn't updated yet? During the test, with both answers there, its a ‘lets make those who studied for hours want to kill themselves' kind of situation.

You're almost better if you don't study it. You'd see actual and actual and use those numbers and be correct.

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[MrsBing]

What is noninterest tax benefits?

Question:

The benefits of debt financing over equity financing are likely to be highest in which of the following situations?

Answer:

Interest on debt is tax deductible by a corporation, while dividends paid are not. Therefore, the major advantage of debt financing is in lowering taxes. This advantage is greatest in periods of high marginal tax rates and few noninterest tax benefits.

Becker, Wiley Test Bank, and Ninja 10 Point Combo!

FAR: 89
REG: 87
AUD: 92
BEC: 75
Ethics: 90

Licensed Arizona CPA

[Determined CPA]

Zig Corp. provides the following information:

Pretax operating profit $300,000,000

Tax rate 40%

Capital used to generate profits 50% debt, 50% equity $1,200,000,000

Cost of equity 15%

Cost of debt 5%

What of the following represents Zig's year-end economic value added amount?

Answer: $180,000,000

I thought EVA was NIAT – Cost of Capital

NIAT – 300,000,000*.6=$180,000,000

Cost of capital =

debt – .05*.5*1,200,000,000 = 30,000,000

equity – .15*.5*1,200,000,000 = 90,000,000

180,000,000 – 30,000,000 – 90,000,000 = 60,000,000 – why isn't this the answer?

Their explanation:

WACC = (Kdebt x Wt.debt) + (Kequity x Wt.equity)

= (0.50 x 0.05) + (0.50 x 0.15)

= .025 + .075 = .100

EVA % = 0.25 – 0.10 = 0.15

EVA = 0.15 x $1.2 billion = $180 million

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[scarletknight91]

BalanceALLtheSheets, flexible budgeting takes into consideration changes in actual output. a flexible budget uses standard costs @ actual levels of output. if you use becker, go to the top of B2-40 for an illustration of this. youll see that the flexible budgeted uses actual output at planned costs. a flexible budget variance, therefore, evaluates changes in price rather than both price and volume to make the variance more meaningful – hence why we utilize flexible budgeting

FAR: PASSED
REG: PASSED
AUD: PASSED
BEC: PASSED

DONE

[scarletknight91]

MrsBing, if im remembering that question correctly, it says that choosing debt over equity is good when there are high tax rates and few noninterest tax benefits? the way i interpreted that was that the govt helps subsidize the cost of debt and that there are few opportunity costs (FEW noninterest tax benefit alternatives) for making the decision.

FAR: PASSED
REG: PASSED
AUD: PASSED
BEC: PASSED

DONE

[scarletknight91]

Determined CPA where did you find this question? i agree with you. thats how becker explained it and how i remember computing it in college

FAR: PASSED
REG: PASSED
AUD: PASSED
BEC: PASSED

DONE

[scarletknight91]

last day, up early cant sleep. which is good bc i can get to bed sooner for my 8am exam haha

FAR: PASSED
REG: PASSED
AUD: PASSED
BEC: PASSED

DONE

[Anonymous]

My exam is at 4:30 so I have a little extra time 😉

[taxman89]

i am at 1230 tomorrow so have time to sleep in a bit. get a decent breakfast or something…..read over some notes/watch some french open (which i have watched basically none so far) and then go beat this sucker (i hope).

AUD - 75
BEC - 77
FAR - 78
REG - 82

AUD: 61-67-75 (Thanks ninja aud)
BEC: 77
FAR: 78
REG:69-73-70-82

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

[Author]

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