[jeff]

Welcome to the Q1 2016 CPA Exam Study Group for BEC.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

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

[Anonymous]

I posted this question on the forum but got no replies (maybe I am overthinking this)

If the IRR is higher than the minimum desired rate of return then the project can be accepted. At first glance this is confusing to me thinking that a higher desired return is a good thing bc I will be receiving more on the investment (maybe this reasoning is incorrect?). Also I read that when the IRR is higher then the NPV is positive and basiclly that is why we accept a project but still I am a bit confused with the concept. So can anyone explain in numbers or in simple words how can an IRR (rate when NPV outflows are = to inflows) higher than the desired rate is a good thing? How does that makes a NPV positive? I keep searching in the Chapter 3 of the Ninja book for examples that explain this but cannot find any. I feel that I keep asking dumb questions but this is the first time in my life going over the IRR and NPV concepts so this is all new to me, any help is appreceated!

[monikernc]

cortes, i just responded to your post in the other thread. i hope it helps.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Veggie]

@payazza2000 Hey! I just received my study material in last night (Wiley), which I'm browsing through and plan to start studing this weekend. I'm planning on taking BEC the last Saturday in Feb, which will give me 5 weeks. I plan on 15-20 hrs a week, which I think will be plenty. I did earn the CMA in July though, so all of the topics are very familiar to me. Good luck!

BEC (2/27) 85

CMA Part 1 (10/14) 440
CMA Part 2 (5/15) 420

[Zyx]

I'm not sure if I'm mistaken or not but I have seen this question before and the correct answer is NOT what ninja says;

A company manufactures two products, X and Y, through a joint process. The joint (common) costs incurred are $500,000 for a standard production run that generates 240,000 gallons of X and 160,000 gallons of Y. X sells for $4.00 per gallon, while Y sells for $6.50 per gallon. If there are no additional processing costs incurred after the split-off point, what is the amount of joint cost for each production run allocated to X on a physical-quantity basis?

A. $200,000
B. $240,000
C. $260,000
D. $300,000
Answer from ninja;
The joint costs should be allocated between Product X and Product Y based on the physical quantity produced.

Physical quantity of Product X = 240,000 gallons
Physical quantity of Product Y = 160,000 gallons
Total quantity produced = 240,000 + 160,000 = 400,000 gallons
Product X has 60% of the physical quantity produced (240,000 ÷ 400,000).
60% × $500,000 (total joint costs) = $300,000

Joint costs are costs incurred prior to the split-off point in a process that simultaneously produces two or more products, each with significant sales value. Costs must be allocated to the main (joint) products, which necessitates the use of a systematic allocation method (e.g., relative sales value at split-off, physical measure, estimated net realizable value method, or constant gross-margin percentage). Byproducts of incidental sales value may also be produced, but joint costs are NOT allocated to byproducts

I think the right answer is B which joint cost is allocated based on sales volume not products volume as it explains above.
Agree?

REG: 77 x2
BEC: 81 x3
FAR: 68 retake 10/1
AUD: 8/27

[Oimie]

Anyone know what page in Roger's textbook where they talk about the balanced scorecard?

FAR 85 June 2015
AUD 80 Nov 2015
REG 83 Nov 2015
BEC 79 Feb 2016

[ELMON]

HI zyx11 @

You Must Look to the Question requirement !!!!

what is the amount of joint cost for each production run allocated to X on a physical-quantity basis ?

Do You See to X On Physical Basis , so you should allocate based on that , if They ask to allocate based on NRV , Then ok you can use the sales price

FAR- 88 MAY 2015
REG- 83 OCT 2015
BEC- 80 Jan 2016
AUD- 79 May 2016
NH
I am Done

Ninga MQ & SIMS Is the Best Way to Pass

[juliakiwi]

@FAR_WARS Thanks for answering,. This was what I thought before but as I read the material from Becker, under compliance objectives it emphasizes that tax and accounting rules so I am confused now? Any further comments?

[FAR_WARS]

I see how that is confusing. However I still think a good rule of thumb for exam purposes is that:

GAAP related = reporting
tax related = compliance

on a side note:
wow becker 1.3 is crushing me.

FAR- 80
BEC- 75
AUD- 78
REG- ?

[Zyx]

ELMON, thanks! I was mistaken. I have to slow down when reading.

REG: 77 x2
BEC: 81 x3
FAR: 68 retake 10/1
AUD: 8/27

[FAR_WARS]

A department adds material at the beginning of a process and identifies defective units when the process is 40% complete. At the beginning of the period, there was no work in process. At the end of the period, the number of work in process units equaled the number of units transferred to finished goods. If all units in ending work in process were 66 2/3% complete, then ending work in process should be allocated

a. 50% of all normal defective unit costs.
b. 40% of all normal defective unit costs.
c. 50% of the material costs and 40% of the conversion costs of all normal defective unit costs.
d. None of the normal defective unit costs.

can someone explain this to me in english?

a- The requirement is to determine the proper allocation of normal defective unit costs to the ending work in process. Normal defective unit costs are spread over the units of good output because the attaining of good units necessitates the appearance of normal spoiled units. The cost of the normal defective units is included in the total costs of the good equivalent units of output. Ending inventory comprised one- half of the total units of good output produced during the year; therefore, it will bear 50% of the normal defective unit costs incurred during the year.

FAR- 80
BEC- 75
AUD- 78
REG- ?

[monikernc]

Farwars… ending inventory= the number sent to finished goods. because the materials are added at the beginning of the process.and ending inventory is 66 2/3% complete all the defective units were removed when units were 40% complete. So, the amount of direct materials in ending inventory = the amount of direct materials sent in the finished goods. Normal spoilage is associated with the direct materials added in the process and is allocated to non-defective goods that are in either WIP or Fin Goods. Of all the direct materials added, some of those goods were found to be spoiled at the 40% mark and the rest moved forward in the process. half of the goods that were not defective are now in ending inventory and half were moved to finished goods. Therefore, the cost of normal spoilage will be split 50/50 to WIP and Fin Goods.

English may not allow for a better explanation but i hope this helps.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[FAR_WARS]

So all of our initial direct materials are now:
50%= WIP
50%= Finished goods

so therefore, the spoilage is allocated:
50%= WIP
50%= Finished goods

Is it really that simple? What a confusing question for a relatively simple concept.

FAR- 80
BEC- 75
AUD- 78
REG- ?

[monikernc]

If you insist on being so succinct, then yes. You are correct, it is just that simple.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[CPA2BEE]

Has anyone seen this question in Becker B1? The book says calculating EUs using the weighted-avg method = Units Completed + (Ending WIP x % Completed)….If that is true then weighted-avg EU for materials in this question would be 106,400 – but the answer claims 113,600. Anybody else run into this problem when working this question?

Kimbeth Manufacturing uses a process cost system to manufacture Dust Density Sensors for the mining industry. The following information pertains to operations for the month of May:
Units
Beginning work-in-process inventory, May 1 16,000
Started in production during May 100,000
Completed production during May 92,000
Ending work-in-process inventory, May 31 24,000

The beginning inventory was 60 percent complete for materials and 20 percent complete for conversion costs. The ending inventory was 90 percent complete for materials and 40 percent complete for conversion costs.

Costs pertaining to the month of May are as follows:
Beginning inventory costs are: materials, $54,560; direct labor, $20,320; and factory overhead, $15,240.
Costs incurred during May are: materials used, $468,000; direct labor, $182,880; and factory overhead, $391,160.

Using the weighted-average method, the equivalent unit cost of materials for May is:
a. $4.60
b. $5.03
c. $4.50
d. $5.46

Explanation
Choice “a” is correct. $4.60 equivalent unit cost of materials using the weighted-average method ($54,560 beginning inventory + $468,000 additions = $522,560 ÷ 113,600 total available equivalent units).

FAR - 80
AUD - 82
BEC - 80
REG - 85

ETHICS - 90
EXPERIENCE - COMPLETE
Application for California license mailed 8/4/2016

[CPA2BEE]

Ok everyone ignore that question. I was taking BEGINNING % completed against ending WIP, where if you multiply it by ENDING % completed it turns out to be Becker's correct answer.

Starting to see double….

FAR - 80
AUD - 82
BEC - 80
REG - 85

ETHICS - 90
EXPERIENCE - COMPLETE
Application for California license mailed 8/4/2016

[Author]

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