[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

[Anonymous]

@stoleway

The demand curve will be vertical because the quantity demanded will remain the same regardless of any change in price (demand is perfectly inelastic).

[stoleway]

correct

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Mass-CPA

[stoleway]

What is the formula for payback reciprocal and what does it represent?

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Mass-CPA

[M.O.D.]

The formula for the payback period = original investment/annual cash flow

The reciprocal is 1/payback period

It is an approximate measure of the rate of return (this is obscure).

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…good job

Ninja says paybackl reciprocal estimates IRR if casflow pattern is stable

REG -63│ 84!!
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Mass-CPA

[stoleway]

Preparation of the master budget culminates with the preparation of what budget?

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Mass-CPA

[M.O.D.]

Budget flowchart: memorized this from Gleim

Short term goals

Operating budget:

Sales Budget: non-production budget (admin, SG&E)

Ending inventory budget

Production budget: DM, DL, OH budgets

COGS budget

Proforma Income statement

Cash receipts from sales

Cash payments (DM, DL, etc)

Financial budget:

Cash budget

Capital budget

Proforma balance sheet

proforma statement of cash flows

So I suppose the culmination is the pro forma financial statements.

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]

Gleim says cash budget…yeah but basically its the financial budget. With your explanation above, I'm pretty sure you would pick cash budget as the right answer. Cash budget was the only financial budget element in the choices given

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

Mass-CPA

[M.O.D.]

Ming Company has budgeted sales at 6,300 units for the next fiscal year and desires to have 590 good units on hand at the end of that year. Beginning inventory is 470 units. Ming has found from past experience that 10% of all units produced do not pass final inspection and therefore must be destroyed. How many units should Ming plan to produce in the next fiscal year?

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]

Sales forecast-units………….6300

Ending Inventory……………….590

Begining Inventory……………(470)

=6420 Units

But 10% of all units produced do not pass final inspection and therefore must be destroyed

production should be inflated to take care of this spoilage, therefore….

6420 / .90 = 7133 approximately

REG -63│ 84!!
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Mass-CPA

[M.O.D.]

correct.

Explain why:

If a manufacturing company uses responsibility centers, which one of the following items is least likely to appear in a performance report for a manager of an assembly line?

A. Supervisory salaries.

B. Equipment depreciation.

C. Materials.

D. Repairs and maintenance.

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)

[Anonymous]

Can anyone explain the meaning of the following sentence?

The statute of limitations for securities fraud is “no later than the earlier of 2 years after the discovery of facts constituting the violation, or 5 years after the violation.”

The wording is very confusing to me. What does no later than earlier of even mean?

[Anonymous]

@arushi89

The wording is a little confusing, but the way I think of it is no later than the lesser of whichever situation applies. So if facts constituting the violation have been discovered, then action must be taken no later than two years from the date of discovery. If facts constituting the violation haven't been discovered, then the action must be taken no later than five years from the date of violation.

[Anonymous]

@M.O.D.

My guess would be B. Equipment depreciation is out of the control of an assembly line manager so they shouldn't be evaluated on this cost. However, they would have control over costs such materials, direct labor, and repairs and maintenance.

[Anonymous]

Thanks @CPA_2_B

That makes sense. I had thought something alone those lines, but was not sure if I was misinterpreting it.

[Author]

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