[jeff]

Welcome to the Q2 2015 CPA Exam Study Group for BEC.

Economic Cycles (All Across the Land)https://www.another71.com/economic-cycles-rap/

Posted by Another71 on Thursday, November 6, 2014

Free NINJA: https://www.another71.com/cpa-exam-study-plan/

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

[AJG38]

@jsch8912…..For your Dollar Euro question.

Lets start in a world with a current exchange rate is $1 = 1E (1 dollar equals 1 euro)

If the dollar price of a euro increases the following could happen….. $1.50 = 1 (1.50 dollar equals 1 euro)

Given the new exchange rate, $1.50 = 1E, you could say that the dollar has depreciated in value because it takes more of them to buy a single euro than before, or you could say the euro appreciates against the dollar, because a euro will now equal more dollars than before.

If the dollar price of a euro decreased, $0.50 = 1E, the dollar appreciates against the euro, and vice versa.

AUD - 91 (4/7/2015)
BEC - 88 (4/29/2015)
FAR - 80 (5/29/2015)
REG - 70 (8/18/2015); 82 (11/08/2015)

Gleim & Ninja Flashcards

[jsch8912]

@Crunchtime I am not listening to the lectures. If it is Tim Gearty, that guy just tells you to highlight the textbook. I am just reading the chapters on my own. You're right, doing tons of questions will help! Yeah man I am referring to the textbook for answers now and then. Is this your first exam?

[jsch8912]

@Agj38 Thanks! I did 1 US = 1.5 Euro and couldn't figure out what I did wrong.

[Crunchtime]

@Jsch8912, I feel if you just read the book it is too in depth and it just makes me go in circles. I passed auditing in January before tax season. I had CPA Excel and I was just spinning my wheels with the material, so I just bite the bullet for becker which seems to be better. Is this your first exam? I just can't figure out a great way to study efficiently, I feel like I need 10 hours a day just to make a dent in the material.

AUD-77
BEC-70,73,68,74 SH##!!!!!, 80
REG-73,76
FAR -74,82

Ethics here I come!!

[ladybossxo]

CPA Exams Done.

[acctaks]

Chapter 2 is killing my life. I don't know why I'm having so much trouble with it. There is one question in particular that really has me fuming. I can get the $2,100 for product B. That's 4x the cm of a + cm of b then dividing that into fixed costs. Why is it multiplied by 4 again to get A? I can get the right answer by taking 75% of the costs of A. Someone please help me understand.

Wren Co. manufactures and sells two products with selling prices and variable costs as follows:

A

B

Selling price

$18.00

$22.00

Variable costs

12.00

14.00

Wren's total annual fixed costs are $38,400. Wren sells four units of A for every unit of B. If operating income last year was $28,800, what was the number of units Wren sold?

a.

9,600

b.

6,000

c.

5,486

d.

10,500

Explanation

Choice “d” is correct. Wren will have sold a total of 10,500 units to achieve a $28,800 operating profit assuming the fact pattern described above. The question requires the candidate to recall the basic contribution margin formula and apply some algebra.

The fact pattern describes that the operating income is $28,800 and the fixed costs are $38,400. The contribution margin is; therefore, the total of the two $67,200.

The basic formula to compute units sold is:

CM per unit x Units = $67,200

The fact pattern indicates that Wren has two products with unique selling and cost patterns.

First, compute the contribution margin:

Selling price

–

Variable cost

=

Contribution

margin per unit

Product A

$18

–

$12

=

$6

Product B

$22

–

$14

=

$8

Second, quantify the selling pattern and the relationship between the products. Wren sells 4 units of Product A for every unit of Product B, so expressing Product A in terms of Product B:

Product A = 4 x Product B

Third, determine the number of units of Product B that were sold:

$6 contribution margin x (4B) + $8 contribution margin x B = $67,200

24B + 8B = 67,200

32B = 67,200

B = 2,100

Fourth, determine the number of Product A and the total number of products sold:

A = 4 x B (4 x 2,100) or 8,400

Total units = 2,100 + 8,400 or 10,500

F-Pass
A-Pass
R-Pass
B-Pass

I'm a CPA!

[Anonymous]

The $2100 represents 1/5 of the total – only product B. 2100 x 4 would represent the selling 4 of product A for every 1 of B.

I was able to solve this by doing the first part of the problem (getting the contribution margin for A and B) and then just testing the first answer. The 9600 quantity was short (approx. 23k OI) so the answer had to be a number greater than that answer.

If I knew 10,500 was the quantity, I knew 4/5 belonged to part A and 1/5 belonged to part B, so I was able to quickly run the numbers because all of the rest of the calculation is known.

[acctaks]

Thanks cherche. The issue I'm having is that you're already taking 4 times the CM of A for each part of B. So, when it's divided into the fixed costs that should be the amount of CM to break even for both products combined. I'm missing something here and I'm not sure what it is. I can do the problem by taking a 3rd of the costs and profit to get the answer. I'm just trying to understand the way they do it.

F-Pass
A-Pass
R-Pass
B-Pass

I'm a CPA!

[jsch8912]

@Cruchtime It is my last exam. I don't know how to study for this one. There are no topics I am good at and at this point, I am burnt out from studying. You'd love to be in my position. Full-time studying. I just want to work on the questions and just learn from there. Do you have NINJA or just using Becker?

[CPAfit]

Hey guys, can you please check this NINJA MCQ? I choose C as I thought Selling price per unit should be multiplied with units sold, not units produced in order to get the selling price. The explanation says otherwise, i would really appreciate your help.

LM Enterprises produces two products in a common production process, each of which is processed further after the split-off point. Joint costs incurred for the current month are $36,000. The following information for the current month was also gathered:

Units Units Separable Selling Price

Product Produced Sold Costs per Unit

---

---

---

---

---

L 10,000 9,500 $20,000 $ 8

M 5,000 4,000 40,000 20

What amount would be the joint cost allocated to Product M, assuming that LM Enterprises uses the estimated net realizable value method to allocate costs?

A.

$20,000

B.

$12,000

Incorrect C.

$15,000

D.

$18,000

Correct answer is D.

Net realizable value equals eventual sales price less separable costs. For Product L, this is $80,000 (10,000 units produced × $8 selling price per unit) less $20,000, or $60,000. For Product M, it is $100,000 (5,000 units × $20) less $40,000, or $60,000.

Net realizable value of the two products together is $120,000, so Product M is allocated 60/120 or 50% of joint costs. Multiplying joint costs of $36,000 by 50% gives $18,000.

[swilk]

Taking the test in roughly 13 days. When I go through the lectures (Roger), the material seems somewhat easy, but I do terrible on the questions!

Not sure how to attack my final 2 weeks of exam prep. I still have about 25% of the lectures to complete. I figure I'll breeze through the lectures, then just start banging out questions, questions, and more questions.

However, when I create a quiz that includes all the sections I've covered, the questions just seem to be all over the map! I understand BEC is a mixed bag of random business concepts, but I would love some insight on the best method to study this mixed bag.

Should I do a bunch of questions by section in order to really nail down each section? Or, as I've done so far (which I also did for AUD) continue to do questions that span all sections, so I get good coverage and the practice quiz mimics the actual testlets on exam day…

I appreciate any insight/techniques…

AUD - 90 (2.26.2015)
BEC - 76 (5.4.2015)
REG - 79 (8.31.2015)
FAR - 76 (2.22.2016)

Roger and Ninja MCQ FTW.

[AJE]

How long is good for studying for BEC? This is my 2nd test I am taking (after taking FAR last week). I am going to do.

Using Becker:

1 day watching lectures

.5 day reading the lecture/writing down notes from going through the chapter

1.5 days doing the homework problems

—-

3 days per section * 6 sections = 18 days + 12 days to a bunch of progress tests and the practice tests = 30 days.

Is that a good way to break it down?

FAR 91 - 04/16
BEC 87 - 05/15
REG 77 - 07/27
AUD 92 - 08/31

[Anonymous]

zubairs – I hope this helps.

The reason you would subtract the flat amount of selling costs from the unit cost * quantity produced is that you would think that the impact of selling costs would already be factored in the unit cost.

So, in the $8 and $20 selling price per unit should include selling costs.

[Crunchtime]

@Jsch8912, your right I would love to be in your position, I have becker and ninja notes, I also have CPA excel if I need more questions but I don't believe that is necessary. Did you just use becker for all the exams? If you used other material how would you compare it to becker?

AUD-77
BEC-70,73,68,74 SH##!!!!!, 80
REG-73,76
FAR -74,82

Ethics here I come!!

[Anonymous]

@Ajg38 – Thank you for the explanation. I was reading and re-reading over and over in the Bisk text about how one's currency depreciates relative to blahblahblah. It was not making any sense until you posted the explanation. Clear as a bell now!

[Author]

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