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Theodore.
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September 14, 2016 at 8:44 pm #836143
jeff
KeymasterWelcome to the Q4 2016 CPA Exam Study Group for BEC.
If this is your first post in the study group – please post your target exam date (just the time frame to preserve your anonymity), and your past history with this exam (optional, of course).
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September 19, 2016 at 9:38 pm #839725
cpa007
ParticipantPlease help me understand this Q?
A company uses a job-order cost system in accounting for its manufacturing operations. Because its processes are labor-oriented, it applies manufacturing overhead on the basis of direct labor hours (DLH).Normal spoilage is defined as 4% of the units passing inspection. The company includes a provision for normal spoilage cost in its budgeted manufacturing overhead and manufacturing overhead rate.
Data regarding a job consisting of 30,000 units are presented below.
Volume Data:
Total units in job
30,000Units failing inspection (spoiled)
1,500Good units passing inspection
28,500
Cost Data:
Per unit
Total cost
Direct materials
$ 18.00
$ 540,000
Direct labor2 DLH @ $16.00/DLH
32.00
960,000
Manufacturing overhead2 DLH @ $30.00/DLH
60.00
1,800,000
Total
$110.00
$3,300,000The 1,500 units that failed inspection required .25 DLH of direct labor hours per unit to rework the units into good units. What is the proper charge to the Loss from Abnormal Spoilage account?
$1,440
$4,140
$3,450
Zero
This answer is correct because manufacturing overhead is appropriately charged for the normal spoilage (provision is made for normal spoilage in manufacturing overhead) and the correct spoilage and rework cost calculations are used [Normal: 1,140 × ($4.00 + $7.50); Abnormal: 360 × ($4.00 + $7.50)] = $4,140.Supporting Calculations
Normal/Abnormal Spoilage Calculation: Correct Incorrect
Total spoilage in units 1,500 1,500
Normal spoilage calculation
28,500 × .04 1,140
30,000 × .04 1,200
Abnormal spoilage 360 300
Rework Cost per Unit Calculation:
Direct labor cost per unit (.25 × $16.00) $ 4.00 $ 4.00
Manufacturing overhead (.25 × $30.00) 7.50 —
Total cost per unit $11.50 $ 4.00September 20, 2016 at 7:34 am #840255mckan514w
Participant@CPA007 – this to me is one of those “the way they ask the question will trip you up” questions. Anyway. The question says that normal spoilage is 4% of goods passing inspection (not produced passing).
So 28,000 passed inspection thus 28,500*.04=1,140 units are considered “normal spoilage”.
The question says that 1,500 failed inspection thus 1,500-1,140= 360 Units must be “abnormal”.
The question then tells you that they re-worked the units using .25DLH and that MFG is applied based on DLH- so you multiply .25 by both the DL rate of 16 and the MFG OH rate of 30 to come up with $4.00 DL + $7.50MFG OH for a total re-work cost of 11.5. Since out of the 1,500 units re-worked 380 units are considered abnormal this means that 360*11.5 0r $4,140 should be charged to abnormal spoilage account.
and they ask me why I drink...
FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2September 20, 2016 at 8:50 am #840369csvirk
ParticipantGuys I finally passed BEC with 84 on 2nd try. Here is what I did for my 2nd try.
Thoroughly went through CPAexel Book.
Hammered NINJA MCQs. Roughly did 3K+. (Went over Each question at least twice and Repeated the ones I got wrong). (I usually go over wrong questions after a day or two just because I was afraid of memorizing them)
Made extensive notes. (Writing will help you retain information)
Rewrote Ninja Notes. (this part is very important and always helped me passing)
Went to COSO website and read through more information.
Practice writing Template available on this forum. (I literally BS in writing portion but sicked with template)
Youtube videos for any topic i felt weak.Last but not least, Participate in this study group. Being active in study group really really helped me understand some topics.
FAR: 71, 77!
AUD: 69, 80
BEC: 72
REG: 84September 20, 2016 at 9:08 am #840417mckan514w
Participantcsvirk CONGRATS!!! That is awesome so happy for you- thanks for stopping in with those study tips too!
and they ask me why I drink...
FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2September 20, 2016 at 11:22 am #840861topenga87
ParticipantJust found out I didn't pass BEC…again, so I'll be retaking in early October
Started studying in 2010, life got in the way majorly.
Starting over Dec 2015
FAR
AUD
REG
BEC 6/7/16 - 67 Retaking on 9/7September 20, 2016 at 12:47 pm #841179Theodore
ParticipantHi guys! Just starting this section. Looking forward to having a really engaged Forum. I heard and what i've read BEC has a lot of calculations… Great! I need me some numbers after going through a rigorous study session with AUD.
FAR: 66, 76!
REG: 76!
AUD: 72, 9/7/2016
BEC: TBADon't Stop When You Are Tired, Stop When You Are Done.
September 20, 2016 at 12:54 pm #841200mckan514w
Participant🙂 welcome Rosy! BTW just responded to your question in the AUD thread but don't think I was of much help 🙂
and they ask me why I drink...
FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2September 20, 2016 at 1:31 pm #841314Theodore
ParticipantIt's ok. I guess I have a whole day today to think about it. Might just go with Becker book and Ninja MCQs and Notes. I wanted the lectures though.
FAR: 66, 76!
REG: 76!
AUD: 72, 9/7/2016
BEC: TBADon't Stop When You Are Tired, Stop When You Are Done.
September 20, 2016 at 1:37 pm #841323Theodore
ParticipantSo I guess I qualify for the 50% discount for Becker. I might go with that and NINJA MCQs
FAR: 66, 76!
REG: 76!
AUD: 72, 9/7/2016
BEC: TBADon't Stop When You Are Tired, Stop When You Are Done.
September 20, 2016 at 2:02 pm #841374cpa007
Participant@makan514w
Many thanks. Now i understand. Really good explanation.September 20, 2016 at 2:03 pm #841386mckan514w
Participant@Rosy- have you tried to google some of the lectures _ I know at least some of Roger's lectures are posted on youtube- personally I don't learn real well from the lectures I tend to zone out ha ha ha so I am much more a read the book type of learner- but if you are an audio visual one you might try that and see if there is enough to get you through.
and they ask me why I drink...
FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2September 20, 2016 at 2:50 pm #841491Theodore
Participant@mckan514w I need lectures. sometimes they help clarify certain things that I don't understand. Just got the 3 month extension with Becker but I am still going to get the NINJA MCQs. The more explanations I get, the better. I am a bit scared of the written portion to be honest..
FAR: 66, 76!
REG: 76!
AUD: 72, 9/7/2016
BEC: TBADon't Stop When You Are Tired, Stop When You Are Done.
September 20, 2016 at 3:35 pm #841566mtaylo24
ParticipantSeptember 20, 2016 at 3:54 pm #841620mckan514w
Participant@mtaylo did you just buy Gliem for re-take or have you been using it all along? what are your thoughts? For instance COSO harder or just different? comparable to the actual exam or just further outfield? Thanks for any info!
and they ask me why I drink...
FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2September 20, 2016 at 4:14 pm #841671mtaylo24
Participant@mckan514w I bought Gleim for my first attempt, did Ninja for my second. I actually regret not staying the course w/ Gleim for my second attempt. They have a few more COSO questions than Ninja (maybe around 93 vs 62) , lots of overlap, just a little more organized. Ninja has more IT (362 vs 323). Ninja is good for throwing you off guard, which is good in final review mode, but Gleim is better as a learning tool imho, even though some of their questions can be quite ridiculous.
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) -
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