[jeff]

Welcome to the Q2 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

[Trying to pass]

@Papogator24
yes please explain?

[Larry]

The question is asking for the net cost of debt.

We already know that the treasury bond which is the debt is at 7 percent. Also, it says that the corporation cannot issue the debt over 1.5 percent above the treasury bond. So, that is a total of 8.5 percent. Then, we get the 8.5 percent times the tax rate of 40% .085(1-.40) = 0.051

Correct me if I'm wrong. I'm not very good at explaining things.

REG - 82
FAR - 78
BEC - 76
AUD - 8/27/16

[Trying to pass]

Thank you!

[Tameka81]

I seeking an online study partner I am planning on doing exam in7/30/16

[angel_cpa]

I take my BEC test in like 4 days (5/12/16). FOUR DAYS. I think I'm doing okay with Ninja MCQs, but it was really only today that I started looking at the Ninja MCQ simulations part (too late? I know) and basically all the questions I've seen thus far are super hard and require me to list key elements, important processes, etc. in my essay/memo, but I can only remember like one or two things from that topic!

I think I'm pretty good with constructing my memos though. I guess my question is, how screwed will I be on exam day if I know just a tiny bit from a topic they are asking me to elaborate on? 🙁

[Larry]

A department adds material at the beginning of a process and identifies defective units when the process is 40% complete. At the beginning of the period, there was no work-in-process. At the end of the period, the number of work-in-process units equaled the number of units transferred to finished goods. If all units in ending work-in-process were 66-2/3% complete, then ending work-in-process should be allocated as follows:

A. 50% of all normal defective unit costs

Incorrect B. 40% of all normal defective unit costs

C. 50% of the material costs and 40% of the conversion costs of all normal defective unit costs

D. None of the normal defective unit costs

The answer is A.

Can someone explain. Maybe I'm not understanding the question correctly and the explanation below isn't helping me.

Units are identified as defective when production is 40% complete. Since the ending work-in-process inventory was 66-2/3% complete, all of the defective units had already been identified in work-in-process as well as finished goods.

The cost of normal spoilage is spread evenly over the remaining good units. At the end of the period, the number of work-in-process units equaled the number of units transferred to finished goods. Therefore, the same defective unit cost is allocated to finished goods as to work-in-process, meaning that 50% of the cost is allocated to each.

REG - 82
FAR - 78
BEC - 76
AUD - 8/27/16

[Larry]

@angel_cpa, you're not going to be screwed. Stay positive. Just make sure you construct the memo or letter properly. What study guide are you using? I'm sitting on 5/16 and I will be reviewing the WC this week for a couple hours. You got this bud.

REG - 82
FAR - 78
BEC - 76
AUD - 8/27/16

[TobeCPA81]

Information on four investment proposals is as follows:

Proposal Investment Required Net Present Value
——– ——————- —————–
A $ 8,000 $3,200
B $12,000 $3,600
C $10,000 $2,500
D $ 4,000 $2,000
Rank the proposals in terms of preference:

A
C, B, A, D

B.
B, C, A, D

C.
B, A, C, D

D.
D, A, B, C

This is Ninja Mcq . The correct answer is option D
Can u guys please tell me what should be the answer to this question . I answered option -A .
Acc to Becker
PI = PV of net future cash inflow / PV net initial investment

[cdn]

Can you please explain why we don't include VS&A in variable costing method? I thought we include all variable. Am I missing something? Thanks

Using the variable costing method, which of the following costs are assigned to inventory?
Variable selling and administrative—— Variable factory overhead costs

a. No. No
b. Yes. Yes
c. Yes. No
d. No. Yes
Explanation
Choice “d” is correct. Under variable costing, only the variable manufacturing costs (direct material, direct labor, variable overhead) are assigned to inventory.

[Ginja_CPA]

@TobeCPA81, the correct answer is D.

A. 3200/8000 = 0.4
B. 3600/12000 = 0.3
C. 2500/10000 = 0.25
D. 2000/4000 = 0.5

The reason the order is D, A, B, C is because you want it in the preference order. The most preferable should be first, and the least preferable last.

If the question wanted the it in order of least preference, A would be correct.

REG: 80 (02/19/16)
AUD: 83 (04/11/16)
BEC: 78 (05/28/16)
FAR: ?

[aatoural]

I have a question as well from BEC2 Becker

A ceramics manufacturer sold cups last year for $7.50 each. Variable costs of manufacturing were $2.25 per unit. The company needed to sell 20,000 cups to break even. Net income was $5,040. This year, the company expects the following changes: sales price per cup to be $9.00; variable manufacturing costs to increase 33.3%; fixed costs to increase 10%; and the income tax rate to remain at 40%. Sales in the coming year are expected to exceed last year's sales by 1,000 units. How many units does the company expect to sell this year?
a.
22,600
b.
21,600
c.
21,000
d.
21,960
Explanation
Choice “a” is correct. Current year sales (in units) are expected to be 22,600, 1,000 more than the 21,600 units sold in the current year. The 21,600 units sold last year is derived from computations of last year sales in units based on last year cost structure data as follows (note that current year increases are irrelevant):

The books says that cm per units is 5.25=7.5-2.25
And that the fixed costs is 105,000=20,000*5.25. According to the book the breakeven in units is fixed costs over contribution margin ratio (BEC 2 page 9), but in the answer they just use contribution margin per units. Anybody gets why they are doing it like this?

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[aatoural]

@Capri1032 although calculatin of contribution margin for variable costing includes variable SG&A, that does not mean those costs are inventoriable. They are still period costs. The only difference between absorption and variable in regards to period and product cost is for fixed overhead, where fixed manufaturing overhead is treated as period costs as well. But variable selling and admin it is always period cost.

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[aatoural]

@capri1032 the pass key table with the lecture highlights on page B2-5 was very helpful to me to understand that concept.. Hope that helps.

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[cdn]

@aatoural – Thanks.

[cdn]

@aatoural – So when I looked at B2-4 for variable costing approach, the equation says:

Revenue
Less: Variable costs ( DM+DL+Variable O/H+Variable SG&A)
=Contribution margin
Less: Fixed costs (Fixed O/H+Fixed SG&A)
=Net Income

So by this equation, I understood it that V SG&A is assigned to inventory.

[Author]

Replies