[gennatay]

I had a question about an MCQ, so I asked a Gleim professor and their response left me with a bad feeling like they were tapping me on the hand for asking. Take a look, am I being overly sensitive about their comment…

Fact Pattern:
The estimated unit costs for Cole Co. using absorption (full) costing and planning to produce and sell at a level of 12,000 units per month are as follows:

Estimated
Cost Item
Unit Cost
Direct materials
$32
Direct labor
20
Variable manufacturing overhead
15
Fixed manufacturing overhead
6
Variable selling
3
Fixed selling
4
Product Question:
Cole’s estimated conversion costs per unit are

a: $35
b: $41
c: $48
d: $67
Your Answer: b
Correct Answer: b

Your Question: If the company was using absorption costing, why wasn’t direct materials taken into account?

Response:
Please note that the answer explanation says that conversion costs are costs spent converting the direct materials. Conversion costs include direct labor and manufacturing overhead. Direct labor and manufacturing costs are costs that *convert* raw materials or direct materials into finished goods.

***

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[Skynet]

mw798- If Gleim CMA is not working for you, have you checked out Wiley's? I remember a few year's back where member's of the IMA got together with Wiley's to create a CMA review. You can check it out on Amazon.

[mw798]

I think I'll pass with Gleim, however, I do miss Becker's teaching methods and Becker really focused in on what you needed to know for the exam. It was very effective.

[Skynet]

That's good mw798. Keep positive. I know that each review course will work for some and not for others but once you find the one that is working for you just run with it. That's what I did with Gleim CPA. I started off with Lambers, than Wiley's, then BISK, and back to Wiley's, but they weren't working. So i just took a chance with Gleim. Worked so far.

Either way, Good luck on the CMA. I know you will pass both sections.

I actually plan on taking that exam, but sometimes in the future though. Right now the main focus is the CPA.

[mw798]

Yeah focus on CPA and get that out of the way. I do recommend however that if you are going to take the CMA, don't wait too long after finishing the CPA. So far I am seeing a lot of overlap from FAR and BEC and it'll help if it's still relatively fresh in your head.

[Author]

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