[jeff]

Welcome to the Q4 2017 CPA Exam Study Group for BEC. 🙂

Introduce yourselves and let your fellow NINJAs know when you plan to take your BEC exam.

The Five Steps (NINJA Framework): https://www.another71.com/pass-the-cpa-exam/

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

[RB]

Starved – the actual exam is not like that, this is a weakness in the Becker software basically where it doesn't compare it the same (its not quite sophisticated enough).

I know this because when I took FAR, my first exam (February 2017), I didn't round anything on the sims, I put in the actual formula into each box and let it calculate (if it was rounding to the same number per the instructions. Note, if the formula result actually displayed 3 decimals then I would type over it to 2). That would give you a wrong answer in Becker, but I somehow got 98 on FAR, so I can say with certainty that putting the formula and getting the same number displayed will give you the points.

As an aside, I was under the impression that all sim answers would be reviewed by a person afterwards, which I learned they are not, unless you're right near the 75. Knowing what I know now I would probably put the actual decimal amount per the instructions, but don't sweat it if you don't because clearly its okay with the formulas or more information and rounding it itself.

Ren, glad to help! Your feedback is so uplifting. Hope I can help a few of you get those extra couple points you need to pass.

[Starved_Wolf]

Thank you so much RB. T-3 days till my exam. RB, would you mind explaining the best way to calculate FOH Volume Variance and Production Volume Variance? I have the other variances down but I struggle with these 2 the most.

[kimphan]

In addition to Starved_Wolf question, I have a related question as well:

Budgeted Production at 6,000 units and charged $42,000 to its factory overhead account. B company applies variable overhead at $3 per direct labor hour and assumes that each unit takes one direct labor hour to produce. The company applied $40,000 of its overhead to WIP based on 5,000 hours. If the company actually required 5,500 hours to produce 5,000 units, what was the total overhead variance and to what extent did volume variances contribute to or offset that variance?

The answer is:
Total overhead var (-$2,000)

Volume var (-5,000)

I don't quite follow the way Becker explained it.

Thanks for your help in advance.

Kim

[rencpa]

PLEASE check on me with this one! I am an extremely creative person…

My steps:

1) Total OH Variance based on T a/c (so bad cannot draw it)

Debit = Actual = $42K (given)
Credit = Applied = $40K (given)

Difference= Debit = $2K and it is UnF b/c Actual > Applied (we spent $42K, while we planned on spending only $40K)

2) Based on the info provided, “The company applied $40K of its OH to WIP based on 5K hours”, calculate the TOTAL OH Rate then based on that calculate the Fixed OH Rate

$40K / 5K hrs = $8/DLHr

Total OH Rate = Variable OH Rate + Fixed OH Rate
$8 (calculated above) = $3 (given) + Fixed OH Rate
Fixed OH Rate = $5/DLHr

3) Calculate the Volume (production) Variance

Budgeted FOH = 6K units budgeted x $5/ DLHr = $30K
“Applied” FOH = 5K unites actually produced x $5/DLhr = $25K

Budgeted FOH – “Applied” FOH = Volume Variance = Fixed OH Variance
$30K – $25K = $5K but it is UnF because we planned to sell 6K units and we actually sold only 5K units (at least this is how I look either is favorable or unfavorable)

Once again… please CHECK on me!! And please correct me!!

I didn't see that question in Becker. Once again, is it from the final exam? Or additional Becker questions?

[kimphan]

Thanks so much Rencpa 🙂 You're correct. I didn't know volume variance = fixed OH variance. This problem is in the Becker Mock Exam. My test is tomorrow. I am so nervous…

Kim

[Rosystilettos]

I seriously think I am all over the place with this section! All these formulas are making me sick to my stomach I can’t handle any more multiple choice. I think the nerves are getting to me knowing I will get three scores in December and the fear of failing all three. I will take exam this Friday and I do not feel at all confident, I am worn out. For those who have taken the exam what would you suggest a study strategy for the next few days? I’ve been practicing multiple choice but thinking maybe I should change my strategy.

[jenpen]

@Rosystilettos I'm with ya! I take the exam next Thursday and I don't feel at all prepared, my MCQ scores are all over the place, and I am just not understanding the concepts like I need to. I am going to re-write my notes from last year and hope that helps put the info in my brain, as well as continuing with MCQ.

AUD - 56 - 68 - 61 - 9/8/16
REG - 75
FAR - 7/15/16
BEC - TBD

Wiley CPAexcel and NINJA 10 Point Combo

[RB]

Kim and Ren –

I had to go over the facts here again, but Ren's explanation is correct. I also think i got this one wrong the first time too. When they refer to volume variance its only the fixed OH volume component, the VOH piece is called the efficiency variance (VOH has efficiency and price/rate variances).
And Ren's explanation is also correct that for FOH overhead, they planned to produce 6,000 units in that factory but only made 5,000, so 1,000 x $5 (standard rate). It's a measure of how much you got out of your existing fixed resource there.

I spent far too many hours going back through overhead variances before my test because of questions like these, It's worth having an understanding but I wouldn't expect a high point coverage for overhead variances themselves. So balance your time during review.

Kim – if you're getting this intricate in your review you should do fine.

Rosy – do you have notes? I know you're kinda in crunch time here. If you're going over MCQ that's fine, focus on what you're getting wrong, make notes to yourself that clarify. Read those a few times before the exam. Make notes on anything you're not strong enough on yet. I know that's kinda broad but tailoring your review depends alot on where you're at with things. I did the wiley free trial and did their IT multiple choice before my exam and was glad I at least had that exposure. Lots of detailed questions, no formulas in the IT portion

[Rosystilettos]

Jennifer/Rb yes I have notes too and even started the good ol flashcard strategy to write down all formulas and definitions lol. When I think it’s working I do multiple choice and I miss it due to simple mistakes in my algebra skills -_- and even right now when I read Rencpa SWOT inquiry my mind went completely blank when I already know this! I haven’t even focused any on tbs or written communications samples since my assumption is knowing the material will get me through those but I’m not even to that point so the time clock is ticking on me.
RB was written communications difficult from your standpoint?

[kimphan]

I really appreciate all of your help and your advice.

I have another question from the mock exam:

Abc com needs to buy 60,000 zippers at a price of $.60 per zipper. If purchase all 60,000 units at the beginning instead of purchase 5,000/month, what is the opportunity cost?

Answer:

Principal x rate × time = intetest

($33,000/2) × 0.08 x 12/12 = $1,320

I have no clue how they came up with the principal value as ($33,000/2). Is it common knowledge? Please advise.

Thanks for your help in advance.

Kim

[Julia]

Im 2 weeks out and freaking out! I have reset my Ninja scores to see where I am at and noticed the questions are different. Anyone else notice this or are the questions changing for 2018?

[RB]

Rosy – the written wasn’t bad, but I would recommend you block say 3-4 hours or so and 1 – go over Becker’s written part lectures that they added, then 2 – do at least 2 written practice problems yourself. I set myself a 40 minute timer and did 2, its good to have some sense going in, and I knew I needed a full hour for them which was perfect, that’s my writing and review style, most people need 45 minutes, but yes I would at least prepare a little for that. Otherwise they weren’t bad.
(If other people are reading who didn't use Becker there are many online lectures available on BEC written, Wiley has one I watched too).

Kim –

The principle is based on: 60,000 units, but 5,000 units they would buy Jan 1 either way so that part doesn’t matter in comparison, so 55,000 units they would buy up front in this example that they would otherwise buy evenly throughout the year. So 55,000 X $0.60 each = $33,000, then basically that principle is outstanding for 6 of the 12 months (if you have even distribution of purchases throughout the 12 months that’s the average. Really, you do a sum of the months 1-11 for how long each payment is outstanding then divide over 12, but it works out to the same answer). Then at the 8% interest rate or opportunity cost.

[houston2017]

Mig Co., which began operations in Year 1, produces gasoline and a gasoline by-product. The following information is available pertaining to Year 1 sales and production:

Total production costs to split-off point $120,000
Gasoline sales 270,000
By-product sales 30,000
Gasoline inventory, 12/31/Year 1 15,000
Additional by-product costs:
Marketing 10,000
Production 15,000

Mig accounts for the by-product at the time of production. What are Mig's Year 1 cost of sales for gasoline and the by-product?

Gasoline

By-Product

$105,000

$25,000

$115,000

$0

$108,000

$37,000

$100,000

$0

Can someone tell me why the answer is D? The way I calculated it was allocating the $120K among the gasoline and the by product.

Example:
270,000/300,000*120,000=108,000
30,000/300,000*120,000=12,000+15,000+10,0000=$37,000

I added the marketing cost to the by-product amount because the problem specifically stated that these were additional by product costs.

[jgod]

Key phrase in problem “accounts for byproduct at time of production.” That means the net realizable value of the byproduct is used to reduce joint costs.

Zero beg inv + reduced joint costs – end inv = your answer.

AUD- 99 (6/8/16)
REG- TBD
FAR- TBD
BEC- TBD

[Starved_Wolf]

I am taking my exam on Nov 30. I don't have time to do Becker's practice exams. I have lots of weak areas that I need to work on so I'm focusing on that and IT. Will I be shooting myself in the foot for not taking these practice exams? I wish i had the time to do them but i havent even started memorizing the formulas yet. Im rereading everything and reworking the mcqs because I keep forgetting stuff.

Can someone tell me if its bad idea to not do the practice exams? Im not sure what i should do now.

[Author]

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