[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

[monikernc]

Farwars, my guess is C.

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]

C is correct.

I said B, here was my reasoning.

applied OH= expected volume/expected cost
actual OH= actual volume/actual cost

therefore, for actual to be bigger than applied, volume=bigger or cost=smaller.

Where did i go wrong? Here is official explanation:

(c) A predetermined factory overhead rate is developed by dividing estimated fixed overhead costs by the normal capacity based on a selected cost driver (DML, cost, machine hours, etc.).

Overhead costs are then applied by multiplying the predetermined rate by the actual volume of the cost driver during the period.

Overhead costs will be underapplied if:
(1) overhead costs are underestimated, making the application rate too small (actual costs are larger than expected), or
(2) normal capacity is greater than actual activity, making the application rate too small (actual volume is less than normal).

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

[monikernc]

I had to sit here and think about it and finally decided that if you underapplied fixed overhead your actual fixed costs are too high for the volume produced. This means the POR based on the estimates is too low. You apply overhead based on the actual use, and it was underapplied so use (volume) must have been low. You use actual costs to determine if overhead was under or over applied so actual costs would have to be higher than estimated for the result to be underapplied.

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

[monikernc]

Looking at what you wrote above and correcting:
Applied OH =(estimated cost/ estimated use) x actual amount
The estimated cost/ estimated use is the POR

Actual overhead = (over)under applied + applied ovh

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]

“if you underapplied fixed overhead your actual fixed costs are too high for the volume produced.”

thinking about it backwards like that makes sense to me- thanks.

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

[payaza2000]

Hey guys something to remember when calculating the equivalent units; Beginning Inventory units * % Complete, you are actually multiplying times the inverse of the % complete. This is a stupid mistake I made like three times.

FAR 5/6/2015- 84
REG 8/3/2015 - 87
AUD 10/25/2015- 69 1/20/2016 -75
BEC 2/26/2016- 80

Thank you God

[FAR_WARS]

so is (end wip*%complete) is the same as [beg wip*(1/%complete)] ?

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

[payaza2000]

For FIFO they will give you the % Complete for the Beginning Inventory, you should apply the inverse to the Beginning Inventory Units. However for the Ending Inventory is multiplied * %Complete Straight. And when calculating the Cost Per Equivalent Unit for FIFO you only include costs incurring in this period (whereas for Weighted Avg you include Beginning + Cost this period in numerator)

How long are you guys taking for the MCQ? took 1:45 for 108 in Becker. Also is it worth it to do practice sims i.e writing this early on? As a result of failing AUD I missed by BEC class, so I don't qualify for Becker Promise. I get the feeling that understanding the material is of much more importance. Full disclosure however my writing sucks.

FAR 5/6/2015- 84
REG 8/3/2015 - 87
AUD 10/25/2015- 69 1/20/2016 -75
BEC 2/26/2016- 80

Thank you God

[monikernc]

When doing equivalent units remember you are trying to determine the amount of work done in the current period in terms of units. If beg inv was 10% complete then it takes 90% of the work to complete it. If 100 units are completed that were 10% complete at beginning, you had to do the remaining 90% in this period to get them done. This is equivalent to 100*.90= 90 units.
For ending inv, if it is 25% complete that is the amount of work done in the current period. If there are 100 units in ending that are 25% complete, it is equivalent to 100*.25= 25 units.
If you started and completed another 100, you did 100% of the work on those units in the current period and 100*100%= 100 units.
The work performed in the period is equivalent to 215 units. equivalent units = 90+100+25= 215

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

[monikernc]

Payaza, i worry that 3 hours will not be enough time for me to finish exam. To go at that pace, every question will have to click for me. That is why i chose to study longer for this exam – i have to see this many times to pick up speed. I am still slow!

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

[payaza2000]

@monikernc

Tell me about it. BEC seems like one of those topics in which you need time to study, I feel like I'm in a funny place because of my failing AUD the first time, and possibly a second. It's thrown my “plan.” off. I can take BEC on the 29th and be not completely ready or wait nine weeks and forget information.

FAR 5/6/2015- 84
REG 8/3/2015 - 87
AUD 10/25/2015- 69 1/20/2016 -75
BEC 2/26/2016- 80

Thank you God

[Gabriella]

@zyx11 since the hiya is gone- I really appreciate your help on that IT documentation it cleared it up for me.

[Sheffi]

What IT documentation????

[FAR_WARS]

@Sheffi:
Flowcharts, ICQs, Narratives, and Documentation trees?

@monikernc, payaza:

So for W.A. equivalent units:

Units Completed
+(End WIP * %complete)
=Equivalent Units

We use the % complete for conversion costs, not the % complete for direct materials? Some problems give multiple percentages to chose from.

and same for cost/EQUs? We always use conversion costs, not DM?

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

[monikernc]

for weighted average you have to include all the costs in beginning inventory – weighted avg treats those costs as if they are incurred in the current period.

as for what percentage of conversion and materials costs to use, and when, it depends on the information given in the problem. remember conversion costs are the costs to convert the materials – labor and overhead. prime costs are direct materials and direct labor but i haven't seen a problem use ‘prime costs' in its wording (yet)

if all materials are added at the beginning of the process, and ending inventory is only 10% complete, get the EU based on the 10% complete. however, if materials are added at the 25% point and ending inventory is only 10% complete you would exclude materials costs. i have yet to see a problem ask for this.

unless otherwise stated for conversion, when ending inventory is 10% complete, use the 10% to get the EU.

once you have the EU's you can apply the costs.

see CPA2BEE's question toward the bottom of the previous page of this thread.

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

[Author]

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