[jeff]

Welcome to the Q1 2017 CPA Exam Study Group for BEC. 🙂

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

[mtaylo24]

Wow, I've done 402 BEC questions today. Thanks nerves!

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[Anonymous]

@mtaylo24 402?! Wow, props to you! My exam is in 2 days and I feel like doing more is making my head hurt.. just reviewing concepts now

[Anonymous]

Does anyone have tips on hedging strategies for currencies?
I think currencies and cost accounting is the most difficult for me..

[cottonkandi]

Anybody watch the Oscar's last night? What a mess up!

[mtaylo24]

@allergic2mornings LOL, Good thing it wasn't Steve Harvey announcing the winner. I haven't seen Manchester or Fences but I felt bad for Denzel 🙁

Variable vs. absorption costing calc questions -> WOW! I just got killed man! This is definitely going to be on my last minute list.

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[cottonkandi]

@mtaylo24- It's not so bad. I used Becker the first couple of times I went through it example I had the formula's in front of me. I didn't care about time I spent on the problem or anything. By the time I got to the 4th set of the same type of questions, I knew the formulas by heart.

[mtaylo24]

^^^True, I'm just trying to fly through the questions at this point to wrap up my “pre-review” review. I forgot how tedious the calcs could be for that one. I had to tell myself to stop and right down the dang on variance analysis formulas the other day because I was doing the same for that sub-unit.

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[A1lessio]

I need help with variances. I can't seem to get the variable manufacturing overhead and fixed manufacturing overhead ones. They throw so many numbers at you, I never know what to multiply to get standard amounts. In school we would draw out those big tables, but Becker has the formulas.

AUD (08/02/2016)

[cottonkandi]

@A1lessio – Check out page 21 of this forum. There's an example there.

[cottonkandi]

Gartshore Inc. is a mail-order book company. The Company recently changed its credit policy in an attempt to increase sales. Gartshore's variable cost ratio is 70 percent and its required rate of return is 12 percent. The company projects that annual sales will increase from the current level of $360,000 to $432,000, but the average collection period on receivables will go from 30 days to 40 days. Ignoring any tax implications, what is the cost of carrying the additional investment in accounts receivable, using a 360-day year?
a.
$2,160
b.
$12,600
c.
$1,512
d.
$2,000

I didn't like the explanation to this question. Can someone explain it to me.

The answer is c.

[mtaylo24]

@allergic2mornings are you using Ninja?

Cost of holding accounts receivable before credit policy change: $360,000 sales ÷ 360 days = $1,000 average daily sales:

- 30 days average collection period = $30,000 average A/R balance
- 12% required rate of return = $3,600 annual interest

Cost of holding accounts receivable after credit policy change: $432,000 sales ÷ 360 days = $1,200
average daily sales:

- 40 days average collection period = $48,000 average A/R balance
- 12% required rate of return = $5,760 annual interest

$5,760 – $3,600 = $2,160 additional annual interest on holding A/R balance.

However, by stating the variable cost ratio, the problem implies it expects a distinction made
between actual investment in A/R and margin earned. The actual investment by Gartshore is its
variable cost, which for a mail-order book company represents cost of goods purchased for sale.
That is, there is no change in fixed costs. Consequently, the $2,160 needs to be reduced to
represent only the interest on the variable cost portion: $2,160 × 70% variable cost = $1,512.

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[mtaylo24]

@a1lessio

VOH $4/machine hours, 10 machine hours are budgeted to output 90 units. Actual output in 98 units. Machine hours used were 900, actual variable overhead was 4000

Actual Costs Incurred ___VOHSV______Amount Budgeted (AQ X SP)_____VOHEV___Amount Applied (EQ x SP)

VOHSV: 4000 – 3,600 (900 x 4) = 400 U
VOHEV: 3,600 (900 x 4) – 3,920 [(98 output hrs. X 10 hrs.) x 4] = 320 F

Amount applied – Actual costs incurred = VOH Flexible budget variance
VOH Flexible Budget variance = VOH spending variance = VOH efficiency variance
3920 – 4000 = 400u + 320 F
$80 under-applied = 80 U

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[meseusy]

Does the calculator on the CPA exam let you do powers or exponents?

[mtaylo24]

@meseusy, Yup, and handhelds are given upon request. Are you worried about EOQ?

AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)

[Anonymous]

Can someone give me a simple breakdown of the differences between a capital, operating, direct finance, and sales lease?
I didn't have much questions on these in my practice so Idk how important they are..

[Author]

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