[jeff]

Welcome 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).

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

[Forem004]

The probe questions would definitely be helpful for our written responses.

[Forem004]

Oh my goodness. I hope I pass this on Monday so I don't have to keep studying this! Mtaylo how did you do

[hhung1485]

Chairs Tables
Sales. $180,000. $48,000
Variable costs. (96,000). (30,000)
Contribution margin. 84,000. 18,000

Fixed costs:
Avoidable. (36,000). (12,000)
Unavoidable. (18,000). (10,800)
Operating income (loss). $30,000. ($4,800)

Assuming the tables line is discontinued, and the factory space previously used to make tables is rented for $24,000 per year, operating income will increase by what amount?
a. 13,200
b. $28,800
c. $24,000
d. $18,000

ok So my understanding is this;

If the tables are discontinued then
Sales = 0
VC = 0
CM = 0

Fixed cost
Avoidable = 0
Unavoidable = (10,800)
Net Loss =. (10,800)

So we got rent of 24,000 – 10,800 loss = $13,200.00

answer is D which is 18,000. Where did I go wrong?

FAR - 93
REG - TBD
BEC -
AUD -

[Forem004]

I got this wrong the first time by looking at it how you did. I forget exactly how they explain it, but it may have had something to do with the contribution margin of 18 not being a factor.

[hhung1485]

@forem004

Here were the 2 answers given
Choice “c” is correct. The elimination of the tables line will eliminate unavoidable costs to the extent that they do not produce an operating loss. The rental income net of the reduced costs is the amount by which operating income will increase computed as follows:

Rental income. 24,000
Tables line unavoidable costs. 10,800
Operating loss. 4,800
Unabsorbed costs. (6,000)
Increase in net income. $18,000

Viewed as a comparison, the change in operating income is as follows:

Rental income. 24,000
Unavoidable costs. 10,800
Net operating income. 13,200
Current operating loss. (4,800)
Overall change/Improvement
in operating income. $18,000

No idea why we include the (4,800) loss that would not exist if the line was discontinued

FAR - 93
REG - TBD
BEC -
AUD -

[WVUCPAHopeful]

@HHung1485- you are on the right track. The only thing you are missing is the net loss on the tables. Because you are not making the tables anymore, you will not have a net loss of $4,800 from them. So- that means you have to add it back. You take the 13,200 which you calculated correctly and add the $4,800 from the loss that you will no longer have. That gives you the $18,000. Make sense?

[WVUCPAHopeful]

Oh my gosh- if you guys are struggling with calculating the cost accounting variances, check out this video! https://www.youtube.com/watch?v=zt2X6OOXBdc&feature=player_embedded

I could not remember the variance calculations for the life of me, but this table makes it super easy. Not sure if it was taken from Becker or some other source, but I don't remember seeing it in my Roger materials. Regardless, it is working for me. So happy I found it- I know I will able able to answer these problems on my exam tomorrow! 🙂

[Forem004]

Is each written part just like an individual testlet as far as you can't go back to one after you look at the next?

[FARISFUN]

@Forem004 No it is like the simulations where all three are separate tabs at the bottom. They are all part of the same testlet.

[struggler]

Yes Forem004. All the WCs are accessible in the last section of the exam until you submit it. You can “hop” from one MC to the next. They all make up the 4th and final testlet.

[mtaylo24]

@Forem004 best of luck tomorrow! Just stopping by to share my post from the exam experience thread:

“My test seemed fair, but I know I got straight robbed on a few questions due to incomplete info. On the other hand I know for sure that I nailed a few of the calcs. BS’d the WC as usual (Im a decent BSer). Lots of head scratchers on the conceptual topics. I have no opinion on how I performed, we will see on score release. Time to restart Reg.”

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)

[Forem004]

Glad you feel decent about it!! Go over and over multiple choice for REG! I see you've had a few attempts at that one, but that strategy increased my score 9 points! Also, in saying that I realized that I can't have all of my attempts saved as my signature. How did you guys do that? If I put in more than one it deletes everything. Unfortunately, I did not get FAR or REG on my first attempt.

[mtaylo24]

^^^^That's the plan! That's what I basically did this past run for BEC. I only turned on lectures when my brain wouldn't allow me to do another MCQ.

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)

[Forem004]

Also, as for the writing portion, is there any type of research material available? I am practicing and came across the question regarding leading & lagging indicators. Other than explaining the three names, I am not sure that I would come up with an explanation for them. What I do know, I have learned recently in studying. So this concerns me! A LOT!!

[mtaylo24]

Nope, no AL for the WCs. I wouldn't really stress them too much though. I glimpsed over a few samples in the Gleim book the day of the exam for each attempt. 2nd attempt, I kind of got a FAR one, which was weird. Opening and closing paragraphs repeat the question they are asking and why its important. for the mid 1 or 2, make some stuff up (pros and cons) to support your opinion. I got a stronger on my first attempt and comparable on my second.

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)

[Author]

Replies