[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]

I think the Profit center cannot have costs that it CAN control

hence:

Fixed Costs can be controlled by the COST CENTER = wrong answer
Variable Costs Can be controlled by the DIVISION= right answer

?

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

[Anonymous]

English is my second language so forgive me if I seem unable to understand basic things but you are saying that bc the profit center controls the variable cost then it should not have alocated the cost of the transaction?

I know that the profit center is a segment responsible for revenues and that is why I found this mcq tricky

[FAR_WARS]

I am just as confused as you are. Maybe someone else will chime in.

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

[FAR_WARS]

I am also having hard time with Becker's Computation Questions. For example this one has lots of steps that make sense, but would be very hard to come up answer on my own.

Stockout Cost = 100 units of safety stock* $5/unit= $500*15% probability= $75 *10 orders/yr = $750

Inventory: $50/unit * 2% carrying cost = 10 stockout units * 100 units of safety stock = $1000 carrying cost

Annual Cost of Safety Stock: $1750

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

[monikernc]

Farwars, for your equation, x = (x-60).40 + 90, where x is pretax savings and 90 is after tax. Think of it this way: pretax savings – tax = after tax savings. The (x-60).4 = tax. It is (pretax savings – depreciation) x tax rate.
The equation is just set to equal pretax savings because that is what you have to solve for to answer the mcq.

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]

@moniker thanks. Now try this:

CyberAge outlet, a relatively new store, is a cafe that offers customers the opportunity to browse the Internet or play computer games at their tables while they drink coffee. The customer pays a fee based on the amount of time spent signed on to the computer. The store also sells books, tee shirts, and computer accessories. CyberAge has been paying all of its bills on the last day of the payment period, thus forfeiting all supplier discounts. Shown below are data on CyberAge's two major vendors, including average monthly purchases and credit terms.

Vendor————-Avg Monthly Purchases—–Credit Terms
Web Master——–$25,000————————-2/10, net 30
Softidee————–50,000————————–5/10, net 90

Assuming a 360-day year and that CyberAge continues paying on the last day of the credit period, the company's weighted annual interest rate for trade credit (ignoring the effects of compounding) for these two vendors is:

a. 28.0 percent.
b. 30.2 percent.
c. 27.0 percent.
d. 29.3 percent.

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

[cpagal]

a??

FAR - 08/30/15 - 90
AUD - 11/12/15 - 92
REG - 01/19/16 - 82
BEC - 02/29/16 - 83

Passed all on 1st attempt using GLEIM (full program) and NINJA (MCQ only)!!!

Louisiana Licensed CPA

[FAR_WARS]

Yes A is correct. Where does the 4.5 come from?

(1/3) * 2.04% * 18 = 12.12%

(2/3)*5.26%*4.5= 15.86%

=27.98= 28%

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

[Blue.auditor]

Hi,

I took the exam Feb 14, Middle East time !
How do I know if AICPA receives my exam data files by Feb 14 11:59pm?

FAR 90 - 11/16/2015
BEC 81 - 2/14/2016
REG 87 - 5/23/2016
AUD - 8/8/2016

[monikernc]

To solve for the interest rate when the discount is not taken , disc%/1-disc% times 360/net days- days in disc period

This is a mix so you have to prorate it. 1/3 * .02/.98 * 360/(30-10) = .1224. 2/3 * .05/.95 * 360/(90-10) = .1579. .1224 + .1579 = .2803 or 28.03%

They tell you to use a 360 day year but they could also say 365 – just use what they tell you.

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]

Blue auditor it has to be by midnight Eastern US time. It is only 930pm Eastern time now so they have 2.5 more hours to upload here. What time is it there right now and how many hours ago did you finish? You may be able to call test center tomorrow to see if they uploaded. Where did you test?

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]

Thanks all, now try this:

Ajax Division of Carlyle Corporation produces electric motors, 20% of which are sold to Bradley Division of Carlyle and the remainder to outside customers. Carlyle treats its divisions as profit centers and allows division managers to choose their sources of sale and supply. Corporate policy requires that all interdivisional sales and purchases be recorded at variable cost as a transfer price. Ajax Division’s estimated sales and standard cost data for the year ending December 31, 2012, based on the full capacity of 100,000 units, are as follows:

———————–Bradley——–Outsiders
Sales—————$900,000—–$8,000,000
Variable costs –(900,000)—–(3,600,000)
Fixed costs——-(300,000)—–(1,200,000)
Gross margin—$(300,000)—–$3,200,000
Units sales———–20,000————80,000

Ajax has an opportunity to sell the above 20,000 units to an outside customer at a price of $75 per unit during 2011 on a continuing basis. Bradley can purchase its requirements from an outside supplier at a price of $85 per unit.
Assuming that Ajax Division desires to maximize its gross margin, should Ajax take on the new customer and drop its sales to Bradley for 2012, and why?

a. No, because the gross margin of the corporation as a whole would decrease by $200,000.
b. Yes, because Ajax Division’s gross margin would in- crease by $300,000.
c. Yes, because Ajax Division’s gross margin would in- crease by $600,000.
d. No, because Bradley Division’s gross margin would decrease by $800,000.

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

[payaza2000]

Is anyone else struggling with the BEC writing prompts. I took a practice test, and really bombed the writing prompts. I was struggling to understand what they were asking for, and to write my answer in a concise, appropriate manner.

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]

Farwars: The answer is A, right? Ajax's gross margin increases by $600,000 but Bradley pays $800,000 more than they are paying now to Ajax.

Payaza, i have not spent a minute on writing.are you trying in ninja or becker?

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]

I can't make any sense of their “shortcut” approach.

(c) The requirement is to determine whether Ajax should take on a new customer and end its sales to the Bradley division and why. As a profit center, Ajax will make the decision independent of the effects on the corporation as a whole. If Ajax sells to the new customer, its revenues will increase to $1,500,000 ($75 × 20,000), but its costs will remain the same at $1,200,000 ($900,000 + $300,000). This results in a positive gross margin of $300,000 ($1,500,000 – $1,200,000). The new gross margin is $600,000 [$300,000 – ( –$300,000)] greater than the original gross margin. The shortcut (incremental) approach is to multiply 20,000 units times the $30 increase ($75 – $45) in Ajax’s unit selling (transfer) price.

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

[Author]

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