[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

[payaza2000]

How are people utlizing NINJA books and notes? I want to take a break from Becker tomorrow?

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[FAR_WARS]

“The investment in the new machine will require an immediate increase working capital of $35,000”

So we are including this 35,000 in our initial cash outlay. Conceptually what does this mean? Give me an example why our working capital went up after buying a new machine for the factory.

@payaza: re-write them until your hand falls off?

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[Dojo4lyfe]

@monikernc thanks

[FAR_WARS]

All of the following are the rates used in net present value analysis, except for the:

a. Discount rate.
b. Hurdle rate.
c. Accounting rate of retum.
d. Cost of capital

answer is c. But how would the cost of capital be considered a rate? Isn't it just a number?

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[Jordanlovefood]

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[KJ562]

Classic 75 score.
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[payaza2000]

@FAR_WARS

I think it would be fair to say that Cost of Capital can be used as your hurdle rate its equivalent to WACC (Weight of Equity * Cost of Equity + WEight of debt * Cost of Debt) you would want to use it to find your discounted cash flows.

When finding NPV you would never want to use Accounting Rate of REturn since it does not account for discounted cash flows.

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]

thanks.

What is the advantage of using the “tabular format” in regards to the variances? Can't I just know how each is calculated and be done with it?

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[payaza2000]

I think an advantage of the tabular format is that it helps create a visual way of looking at the difference in variances, and allows you to see where its coming from (efficiency, price/spending)

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

[payaza2000]

A company manufactures a product using one material per unit. The following information for the upcoming budget year is available:

Number of units sold 14,500
Budgeted beginning finished goods inventory units 1,500
Budgeted ending finished goods inventory units 3,000
Budgeted beginning direct materials inventory units 2,000
Budgeted ending direct materials inventory units 1,500
Direct manufacturing material cost per unit $5
What amount is the total direct materials purchasing budget?

A.
$67,500

B.
$72,500

Correct C.
$77,500

D.
$80,000
Question #: 1170 Category: 5C1 Budget and Analysis

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]

payaza, do you need help with Q1170? if so, do T-accounts for Finished Goods and Direct Material (no Work In Process in this example) and work your way back to Direct Material purchases. You will 15, 500units. then 15,500*$5 = $75,500

post again if you still need help

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[payaza2000]

No. I was good on this one. However this one I do need help with this one:

Berol Company plans to sell 200,000 units of finished product in July 20X1 and anticipates a growth rate in sales of 5% per month. The desired monthly ending inventory in units of finished product is 80% of the next month's estimated sales. There are 150,000 finished units in inventory on June 30, 20X1.

Each unit of finished product requires four pounds of direct material at a cost of $1.20 per pound. There are 800,000 pounds of direct material in inventory on June 30, 20X1.

Berol Company's production requirement in units of finished product for the three-month period ending September 30, 20X1, is:

A.
712,025 units.

B.
630,500 units.

Incorrect C.
664,000 units.

D.
665,720 units.
Question #: 1079 Category: 6B Cost Measurement Methods and Technique

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]

i reworked and i think the answer is D?
if so, july sales are known 200,000, calculate sales for august 200,000*1.05= 210,000, september 210,000*1.05=220,500, and october 220,500*1.05=231,525

then calculate ending inventory for july 210,000*.80 = 168,000, august 220,500*.80 = 176,400, and sept 231,525*.80 = 185,220.

units of fin product = Ending + Units Sold – Beginning. for July, 168,000 + 200,000 -150,000 = 218,000
Aug, 176,400 + 210,000 – 168,000 = 218,400
Sept, 185,220 + 220,500 – 176,400 = 229,320
218,000 + 218,400 + 229,320 = 665,720

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

[wombataholic]

I came up with D – 665,720. This would be so much easier to explain if we could post tables.

Anticipated Sales:
July – 200,000
August – 210,000 (200,000 * 1.05)
September – 220,500 (210,000 *1.05)
October – 231,525 (220,500 * 1.05)

July Production
Starting inventory: 150,000
Production needed to meet July sales: 50,000 (200,000 – 150,000)
Production for next month's sales: 168,000 (210,000 *.8)
Monthly Production: 218,000
Ending inventory: 168,000 (218,000 + 150,000 – 200,000)

August Production
Starting inventory: 168,000
Production needed to meet August sales: 42,000 (210,000 – 168,000)
Production for next month's sales: 176,400 (220,500 *.8)
Monthly Production: 218,400
Ending inventory: 176,400 (168,000 + 218,400 – 210,000)

September Production
Starting inventory: 176,400
Production needed to meet September sales: 44,100 (220,500 – 176,400)
Production for next month's sales: 185,220 (231,525 *.8)
Monthly Production: 229,320
Ending inventory: 185,220 (176,400 + 229,320 – 220,500)

Total production for July, August and September: 665,720 (218,000 + 218,400 + 229,320)

Licensed CPA
Passed each section on the first try with Ninja Notes/MCQ/Audio

[monikernc]

tables would be nice. i eventually got there. it did make me think that using the spreadsheet during the exam might be helpful for these unless it just sucks so bad it is useless. i will put it on my list of things to try when i do the aicpa practice exam for bec later in the month. if it works i will set up the calcs to see if it solves quicker. may be a waste of valuable time but i will check it out.

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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