[jeff]

@h0wdyus

Incorrect

The answer is B. Comparable sales.

“The use of comparable sales is not an income approach to valuation of a business, it is a market approach. Under the comparable sales approach, the value of a business is determined by comparing it to other entities with comparable characteristics for which the value is more readily determinable.”

This was a tricky one

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

[GoVPI]

Alexandria Cupcakes is evaluating its manufacturing overhead spending by performing variance analysis. Management has gathered the information below. Use this information to calculate the fixed overhead volume variance.

Actual results: Cupcakes made – 8,000; fixed overhead costs – $12,000; 200 direct labor hours

Budgeted results: Cupcakes made – 9,000; fixed overhead costs – $10,260; 0.03 labor hours per cupcake

A $1,740 favorable

B $1,140 unfavorable

C $1,140 favorable

D $1,740 unfavorable

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[Zackrampage]

B?

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[GoVPI]

@zack.. Yes! Nice job

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[Zackrampage]

@CPA Sweet. I didn't fully get the number but knew it was unfavorable lol. I am getting better at variance ques though.

Ques: Which of the following areas of responsibility would normally be assigned to a systems programmer in a computer system environment?

a) Systems analysis and application programming

b) Operating systems and compilers

c) Computer operations

d) Data communications hardware and software

I don't understand why a programmer would operate something I thought only operator operates. GRR!

FAR - 62 , End of aug 2015
BEC - 67, 67
AUD - TBD
REG - TBD

[M.O.D.]

@ stoleway

Where does that question come from? It sounds more like a REG question.

It is not covered in Gleim.

@ CAP14

$10260 budgeted /9000 budgeted = $1.14 fixed OH per cupcake

$1.14 x 8000 actual cakes = $9120 allocated

difference is $1140 unfavorable fixed overhead volume variance because less was allocated than budgeted

@zack

Systems programmers work on operating systems (ie Windows, OS)

Computer operators work on computer operations (ie backup, networking)

Application programmers work on application programs (ie Quickbooks)

System analysts design systems (ie systems analysis)

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[stoleway]

@cpain….the answer is 3000 , but I think it should be 5000 because there are two sureties and one was released without the consent of the other, so the remaining guarantor will only pay half of the total debt.

This is my .002$

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[M.O.D.]

A company purchased property that it expects to sell for $14,000 next year. The net present value of the investment is $1,000. The company is guaranteed an interest rate of 12% by the bank. What amount did the company pay for the property?

A. $13,000

B. $13,500

C. $11,500

D. $12,500

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[GoVPI]

Hmm.. Explain. I hate working backwards!

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[stoleway]

MOD, I picked this question from cpareviewforfree.

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[M.O.D.]

@ CPA14, on the CMA you get partial credit so show me what you have…

@stoleway

Thanks, what do you think of the cpareviewfor freee?

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[stoleway]

MOD….Some of the questions over there are very tricky and tough, lots of information. Its the same case with Ninja. I have subscribed with both ninja and cpareview just to have a feel of the varieties these test banks represent. I'm putting my last $$$ in this because I simply cant afford to be studying BEC over and over again.

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[GoVPI]

I was doing 14,000 x .12 = 1680

14000-1680 = 12,320 – 1000 = 11,320. But thats not answer.

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[stoleway]

After tax cash flow will be

Salvage Value/ 1+ Interest rate = 14,000/ 1.12 = 12,500

NPV = after tax cash inflow – initial investment

1000= 12500- X

X= 11500

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[M.O.D.]

@ CPA14

The question compares the present value of an investment (cash outflow) and a return (cash inflow). The difference is positive 1000, which means that the cash inflow is more than the cash outflow.

So PV inflow – PV outflow = 1000

The PV outflow is the price paid for the property.

The PV inflow is the PV of the selling price (14000)

to calculate the PV you divide by 1+int rate so 14000/1.12 = 12500

12500 – PV outflow = 1000

PV outflow = 11500 (price paid for the investment in the present)

you should know simple PV calculations:

to take it forward one year x (1+ rate)

multiple years: keep multiplying for each year

to take it back one year /(1+rate)

multiple years: keep dividing for each year

@ stoleway

How are you notes and note review?

Keep in mind MCQs are meant to test your knowledge not to give you knowledge.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[stoleway]

@M.O.D.

I have been taken notes and I can easily give you any formulae at the top of my head, I'm very much comfortable with the calculation aspects, but some of the concepts I meet on the exams actually comes from hell coupled with my poor writing skills. I have always scored weaker on the WC so I'm focusing on that part as well.

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Author]

Replies