[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]

The Hammerhall Corporation is considering the possibility of investing in a new project. If the project is undertaken, sales will amount to $70,000 per year. Variable cash operating expenses are expected to be 60 percent of that amount. Fixed operating expense (made up of only depreciation expense) will be $12,000 per year. The company’s effective tax rate is 30 percent. What is the annual after-tax cash inflow that is anticipated if this project moves forward?

A. $11,200
B. $13,800
C. $19,600
D. $23,200

[pyacpa49]

@Trying to pass: Well nvm your post for correct answer is B wasn't there when I started mine.. Well I'm stumped..

Edit: No wait I got it. It's Beg. Inv. + Units STARTED and completed. + Ending Inv. So: BI 4,000 + S&C 46,000 + EI 800 = 50,800 EU. Then the costs are only the costs of this period because of FIFO. So $320,000 current period costs / 50,800 EU = 6.299 –> rounds to $6.30.

S&C = 50,000 Units started less 4,000 ending Inventory.

[Anonymous]

Can anyone explain better why is this statement FALSE please? Thanks again.
False:
ROI relies on financial measures that are capable of being independently verified while other forms of performance measures are subject to manipulation.

Explanation:
Many financial measures such as ROI, Residual Income and Contribution Margin Percentage are capable of being independently verified.

[Anonymous]

Anyone please help.
I need a simple explanation for this problem.
What’s the correct formula for fixed overhead variance?
Is this formula correct?
FC-OH VARIANCE = SR x (AV – SV)
SR [Standard Rate]
AV [Actual Volume]
SV [Standard Volume]

Based on standard direct labor hours, a fixed overhead volume variance measures:

A.
deviation from standard direct labor hour capacity.

B.
deviation from the normal, or denominator, level of direct labor hours.

C.
fixed overhead efficiency.

D.
fixed overhead utilization.

The correct answer is B.

Fixed overhead volume variance is the difference between fixed overhead applied using a predetermined rate and budgeted fixed overhead. If fixed overhead is applied on the basis of direct labor hours, a deviation from the normal, or budgeted, level of direct labor hours used in determining the predetermined rate, would result in a fixed overhead volume variance.

[Trying to pass]

How you come up with 46,000 units ITHOUGT that is 40,000 calculated as (50,000-10,0000)?

[Anonymous]

Examples of Nonfinancial Measures:
8 [SOLITUDE]
S – Schedule Attainment
O – On-Time Deliveries
L – Labor Efficiency
I – Inventory Turnover
T – Throughput Time
U – Units per Hour
D – Defective => Percentage of Defective Products
E – Environmental Compliance Measures

Examples of Financial Measures
10 [FIREPLACE]
F – Free Cash Flow
I – Investment [ROI]
R – Ratio => Quick Ratio
E – EPS
P – Price/Earnings Ratio
L – Low-cost /Economic-Value Added
A – Asset [Return on Asset]
C – Current Ratio; Cash Asset Ratio; Capital Asset Ratio
E – Equity [ROE]

[Anonymous]

Is there any technique to answer this kind of $#1t?
I cannot even follow through the explanation much more with the question.
I so hate the wordings like… “Product X went to visit Product Y, creating Division A back to Division B, then added and multiplied and divided BLAH BLAH BLAH….”

Spring Co. had two divisions, A and B. Division A created Product X, which could be sold on the outside market for $25 and used variable costs of $15. Division B could take Product X and apply additional variable costs of $40 to create Product Y, which could be sold for $100. Division B received a special order for a large amount of Product Y. If Division A were operating at full capacity, which of the following prices should Division A charge Division B for the Product X needed to fill the special order?

A.
$15

B.
$20

Correct C.
$25

D.
$40

You are correct, the answer is C.

At full operating capacity, Division A would be losing sales to the outside market if it chose to sell Product X to Division B. Therefore, the transfer pricing should be equal to Product X's market price of $25.

At less than full operating capacity, Division A may choose to sell Product X to Division B for less than the market price, since Division B can further process that product into Product Y and create a profit for Spring Co.

Division A would not charge more than market price to Division B, since they are the same company

[pyacpa49]

@Trying to pass you are only looking for the units started and completed in the current year. 50,000 units were started this year, and 4,000 were left in EI at the end of the year. So that means only 46,000 were started and completed in the same year.

Does that make sense? Also, was there an explanation for the solution?

[lolo]

It's Beg Balance to complete. + Units STARTED and completed. + Ending Balance. So: BB to complete 4,000(10,000*40%) + S&C 46,000(56,000-10,000) + EB 800 = 50,800 units. 320,000/50,800=6.3.

My Nick name is sunshine, but the fact is I have not been in touch with it since I started this CPA exam! IT HURTS

AUD - ✔ Passed Becker self study!
BEC - ✔ Passed Becker self study!
FAR - ✔ Passed Becker self study!
REG - TBD

[pyacpa49]

@.Sunshine. I agree with the 46,000 but it looks like I got it a different way. Where does your 56,000 come from?

I used 50,000 because the problem says units started this year were 50,000. Either way it looks like as long as we are consistent we would get the same answer both ways. Regardless of the approach we use.

[lolo]

I calculated it this way: the Beg balance is 10,000 and the started units are 50,000 and the ending balance is 4,000, I said if we only have 4,000 in the ending balance then 56,000 units are fully completed, 10,000 from the BB and the rest the 46,000 started and completed. to get back to the formula BB to complete (10,000*40%=4,000) and started and completed 46,000 and EB 800 = 50,800 units. 380,000/50,800 = 6.3 …

@pyacpa49, the way you calculate the number is not correct since you ignore the BB, be careful it worked in this problem but it wont work in others!

My Nick name is sunshine, but the fact is I have not been in touch with it since I started this CPA exam! IT HURTS

AUD - ✔ Passed Becker self study!
BEC - ✔ Passed Becker self study!
FAR - ✔ Passed Becker self study!
REG - TBD

[RE2PECT]

Has anyone been practicing the WC? Are we supposed to sign a memo at the end? Becker doesn't in their examples, but Roger does in his.

FAR: 75 Roger & Ninja (notes/flashcards/audio/MCQ)
AUD: 73, 81
BEC: 71, retake 8/29
REG:

[Spartans92]

I have done a few of those WC. They seem to be pretty straight forward and not hard as long you understand the concepts. Becker is just above and beyond with their response LOL. The wording and everything is just so perfect.

BEC- PASS

[Spartans92]

I just purchased the BEC MCQ (first purchase) can anyone explain how to best utilize the software? LOL I have about 5 days left to use it. I have done several Progress test on Becker thus far.

Also, is it normal for the site to be that slow? It takes like 1 min to load to the answer..

BEC- PASS

[Anonymous]

I am not the best scorer here to give an advice, but personally I prefer the customized approach at the very start. I like to see all the new questions first, then missed questions till I hit the adaptive stage.

[Author]

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