[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

[FAR_WARS]

A futures hedge entitles the holder to either purchase or sell a number of currency units for a negotiated price on a stated date. Futures hedges are used for smaller amounts.

A forward hedge is similar to a futures hedge, but the owner of the contract is entitled to buy or sell volumes of currency at a point in time. Forward contracts identify groups of transactions for larger amounts.

A call option is when we are doing the buying.
A put option is when we are doing the selling.

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

[JMCAPASSO]

Why do i have such a hard time with costing questions….can someone please help what “KEYWORDS” to look for and how to even begin to look at a problem like this please…

The New Wave Co. is considering a new method for allocating overhead to its two products, regular and premium coffee beans. Currently New Wave is using the traditional method to allocate overhead, in which the cost driver is direct labor costs. However, it is interested in using two different drivers: machine hours (MH) for separating and roasting beans, and pounds of coffee for packing and shipping. Machine hours for the current month are 700 hours, direct labor cost per pound of coffee is $1.25, and direct materials cost per pound of coffee is $1.50. There are 1,000 pounds of coffee packed and shipped for the current month. The following data are also available:
Regular Premium

Overhead for the current month $5,000.00
Cost pool for separating and roasting beans 3,500.00 150 MH 550 MH
Cost pool for packing and shipping 1,500.00 500 pounds 500 pounds

What is the total cost per pound for the premium coffee using the new activity-based costing method?
a. $7.75
b. $9.75
c. $5.75
d. $5.00

THE ANSWER IS “B”

AUD - 49, 66, 72, 77!!
FAR - 72, 73, 78
BEC - 70, 74, 79, I'm DONE!!!!!!
REG - 70, 76!!!! FIRST PASS

Don’t faint in the day of adversity. Remember your ABCs—Adversity Builds Character!!! - Andy Andrews

[monikernc]

JM… total cost per pound = direct materials per pound $1.50 (given), + direct labor per pound $1.25 (given) + overhead per pound. Total overhead = $5000 and has two cost pools, $3500 is pooled for the machine hours for separating and roasting, and $1500 is pooled for pounds of coffee for packing and shipping.
700 total machine hours were used. $3500/700=$5 per machine hour. $5 * 550 machine hours for premium = $2750. $2750/500 pounds of premium = $5.50 per pound.
1000 total pounds of coffee were packed and shipped. $1500/1000=$1.50 per pound.
Total overhead for premium per pound = $5.50+$1.50=$7.00.
Total cost of premium per pound = DM $1.50 + DL$1.25 + OH $7.00 = $9.75

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

[Anonymous]

@JMCAPASSO I am starting to feel comfortable now with cost but it has been a process. I think that in that mcq they were testing the ABC costing system concept vs traditional costing systems, why cost drivers are used and how they are used. They told that the company was using the traditional costing system were only one cost driver was used to apply OH. Cost drivers are used since there are some cost (indirect) that are neccesary to produce a product but are hard to track down and apply correctly, in other words DL and DM can be easily traceble in a production of a product but you need something (cost drivers) to apply OH (indirect but neccesary costs). In this mcq the company decided to use two cost drivers to apply OH and asked for the TOTAL COST PER UNIT of the premium coffee (including easy traceable cost and the OH). They gave the cost per unit of the easily traceable cost (DL and DM ) and gave you the total OH of 5,000 so we needed to know how to allocate and apply it according the amount of activity of the cost drivers. In order to do that we needed to know what the consumption of 550 of MH and the 500 pounds for packing for the premium coffee meant in terms of COST PER UNIT. That is what monikernc got to interpret with the calculations.

[user2701]

I am giving BEC tomorrow. God knows how will it be.
Feel as if I am less prepared.
Using Wiley text book & question bank.
Which one should I go for after BEC ? AUD or FAR ?
How are NINJA MCQ's. Folks please help me with it.

All the best to all of you

BEC- 43(Feb'16), Retake-June 10, (Wiley text book/WQB/NINJA MCQ)
REG- TBD
FAR- TBD
AUD- TBD

[Anonymous]

The allocation of OH is were it gets tricky and is were I sometimes struggle. Here they told us that 1,000 pounds were processed and they wanted to know what was their premium portion cost per unit. 500 pounds were from premium. Another way to get the cost per unit for the 500 of premium could be:

550/700 = 78.5% usage of premium
78.5%* 3500 = 2750 OH to premium
2750 / 500 pounds per coffee = 5.5 cost per MH from OH

1500/2 = 750 OH to packing from premium
750 / 500 pounds of premium = 1.5 cost per packing from OH

[1dayatatime]

Just took BEC.

– The written communication has easier prompts than Becker
– Way more IT than I'd hoped for
– Waaaaaaaaaay more conceptual/scenario-based compared to Becker. Becker did a poor job there. Their practice Q's were filled with ridiculously lengthed math problems and I don't think I got a single problem on the real test that took more than 2 or three steps of calculations.

AUD - Pass
REG - Pass
BEC - Pass
FAR - Pass

[Anonymous]

@1dayatatime sounds like you did alright? I dread IT even scoring in the high 80s on the mcqs I still feel uncomfortable

[FAR_WARS]

https://books.google.com/books?id=sSusBwAAQBAJ&pg=PA398&lpg=PA398&dq=%22EF+and+GH+represent+the+profit-volume+graphs+of+a+single-product%22&source=bl&ots=_y99IOfUjt&sig=5aVeoOKpwjpe8z2zdNs2EtXM6sc&hl=en&sa=X&ved=0ahUKEwiu59is6_PKAhVU_WMKHUyjB54Q6AEIOTAF#v=onepage&q=%22EF%20and%20GH%20represent%20the%20profit-volume%20graphs%20of%20a%20single-product%22&f=false

If that link works, try #11. Answer is a. I feel it should be d.

Here is the explanation:

(a) The profit-volume (P/V) chart provides a quick condensed comparison of how alternatives for pricing, variable costs, and/or fixed costs may affect net income as volume levels change. In this problem, sales prices remain constant and, therefore, are not relevant. In a P/V chart, the vertical (Y) axis represents net income/loss in dollars. The horizontal (X) axis represents volume in units or dollars. Points on the Y axis above the intersection with the X axis represent profits while points below the intersection represent losses. Total fixed costs are represented by the point at which a specific P/V line intersects the Y axis. This point is always below zero on the Y axis. Because point G (where the P/V line for 2002 intersects the Y axis) is closer to zero than point E (where the P/V line for 2001 intersects the Y axis), point G is less negative; therefore, total fixed costs decreased from 2001 levels. The effect of total variable costs on net income is represented by the positive slope of a P/V line. Variable costs stay the same per unit but change in total as volume levels change. Therefore, a higher per unit amount of variable costs causes a lower per unit amount of net income across various volume levels. Because the graph represents changes in levels of totals, a steeper P/V line slope indicates more profit per unit. Because the slope of line GH (the P/V line for 2010) is less steep than the slope of line EF (the P/V line for 2001), net income per unit is less in 2002 than in 2001. Variable costs, therefore, rose between 2001 and 2002.

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

[Anonymous]

Farwars I agree with the book on this one. The G point of 2002 being closer to $0 (breakeven point) means that taking into consideration that the Y axis goes from negative (loss) at the botton and goes up till making a profit then we can say that a point closer to $0 means a less negative amount. Point G is also called intersection or intercept (sorry but right now cant remember the actual term), there total cost equals fixed cost since there is no production and no variable cost to assign. Since there is nothing more to take into account besides the fixed cost then at intersection net loss = fixed cost.

Also after the point of intersection or intercept comes production and variable cost per unit. If variable cost per unit produced are higher then the line would be less steeper since more units produced represent a low income per unit. The X axis is the quantity so as more quantity is produce the line will go to the right at the same pace as 2001 bc they are producing the same quantity but in 2002 there is less profit per unit since there are more variable cost per unit. That is why the 2002 line is less steeper.

[Anonymous]

So tired…I will go to sleep now I hope I do not come back here tomorow to see that my tiredness made me write nonsense

[Anonymous]

Morning all! Another weekend session begins. I was up till 10 last night finishing up B2 in Becker (mostly cost accounting and budgeting). Today I will do B3 (financial management) and B4 (IT). I finally am scoring in the 90s on the cost and budget homework and was feeling good until I read stgeorge's post on the main page…OMG that kid prepared!!! I feel like a slacker in comparison even though I am have done all the MCQs at least 4 times by this point.

Oh well. I am less than two weeks out and am trying to remain positive. Things seem to be (finally) clicking, and at this point it is all about refining what I do not know, learning it, and ensuring that it sticks in short term memory. I have a ridiculously long list of notes and flashcards that I want to sort out this weekend into “memorize” and “don't need to review” piles.

Good luck and happy studying!

[Anonymous]

EDIT: Both Point G and E (not only G) are at the intersection where Net loss = Fixed Cost

[payaza2000]

Supply Curve shifts to the left casing a decrease in the level of supply and demand curve shifts to the right as a result of increased government spending? What is the net effect on the equilibrium of the economy?

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

[Anonymous]

@ payaza, is the answer that equilibrium quantity increases but the effect on price is unknown?

[Author]

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