BEC Study Group Q1 2015 - Page 26

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  • January 1, 2015 at 3:14 am #655449
    JS867_5309
    Member

    TY for posting the explanation – I was only adding the increase in inventory to the CL side.

    I feel like you can almost always know when you're headed down the wrong path if you get a repeating decimal, like .33 or .6667. Anyone else notice this?

    Exam:I'm done 🙂 🙂 🙂
    REG - 71 (2/22/14); 67 (4/3/14); 74 (8/29/15); 83 (2/29/16)!!!
    BEC - 72 (5/24/14); 85 (1/3/15)!!!!
    AUD - 72 (8/23/14); 76 (10/15/14)!!!
    FAR - 77 (5/26/15)!!!

    Started in 2013 using Kaplan and failed REG, REG, BEC, AUD. Switched to NINJA suite in Sept 2014 and passed AUD...then BEC...then FAR!
    REG took 2 tries but I finally got it in too!
    I'm a hard convert - Using NINJA method with NINJA video/book/notes/MCQ

    Education: Check
    Experience: 3 months left! I hit 4 years on May 30 🙂

    January 1, 2015 at 3:25 am #655450
    Anonymous
    Inactive

    Can someone please explain the logic behind this?

    Marston Enterprises sells three chemicals; petrol, septine, and tridol. Petrol's unit contribution margin is higher than septines which is higher than tridols. which one of the following events is most likely to decrease the company overall break even point point?

    a change in the relative market demand for the products with the increase favoring petrol relative to septine and tridol

    January 1, 2015 at 3:54 am #655451
    Anonymous
    Inactive

    @dsch

    Petrol has the highest contribution margin, so it has the highest profit margin of the three products it sells. If the demand goes up they will sell more. Their breakeven point for all thee products will reduce because they are selling more of the most profitable product

    January 1, 2015 at 4:13 am #655452
    Anonymous
    Inactive

    but i dont get why the breakeven point would be reduced….

    January 1, 2015 at 4:38 am #655453
    mtwst113
    Member

    @dsch9319 increasing the number of units of petrol sold *decreases* the total number of units (petrol, septine, and tridol combined) the company would have to sell to breakeven

    BEC | √
    AUD| √
    FAR| Spring 2015

    January 1, 2015 at 5:15 am #655454
    Anonymous
    Inactive

    The increase in petrol is increasing the contribution margin ratio

    Think of it with the formula :

    Total fixed cost / contribution margin ratio = break even point in dollars.

    100/.4 = 250

    100/.5 = 200

    January 1, 2015 at 4:58 pm #655455
    Anonymous
    Inactive

    Here's one (and show your work):

    Clay Co. has considerable excess manufacturing capacity. A special job order's cost sheet includes the following applied manufacturing overhead costs:

    Fixed Costs: $21,000

    Variable Costs: $33,000

    The fixed costs include a normal $3,700 allocation for in-house design costs, although no in-house design will be done. Instead the job will require the use of external designers costing $7,750. What is the total amount to be included in the calculation to determine the minimum acceptable price for the job?

    A. 40,750

    B. 54,000

    C. 36,700

    D. 58,050

    January 1, 2015 at 5:42 pm #655456
    JS867_5309
    Member

    D?

    I originally thought the FC listed were considered sunk, but 21,000 + 33,000 + 7,750 = 61,750 and that isn't an answer. That means that the cost sheet must have been prepared incorrectly and the 3,700 isn't sunk, but misapplied. 61,750 – 3,700 = 58,050.

    Exam:I'm done 🙂 🙂 🙂
    REG - 71 (2/22/14); 67 (4/3/14); 74 (8/29/15); 83 (2/29/16)!!!
    BEC - 72 (5/24/14); 85 (1/3/15)!!!!
    AUD - 72 (8/23/14); 76 (10/15/14)!!!
    FAR - 77 (5/26/15)!!!

    Started in 2013 using Kaplan and failed REG, REG, BEC, AUD. Switched to NINJA suite in Sept 2014 and passed AUD...then BEC...then FAR!
    REG took 2 tries but I finally got it in too!
    I'm a hard convert - Using NINJA method with NINJA video/book/notes/MCQ

    Education: Check
    Experience: 3 months left! I hit 4 years on May 30 🙂

    January 1, 2015 at 5:50 pm #655457
    JS867_5309
    Member

    Although now I'm second-guessing myself. If the FC are all sunk, then it's probably more logical to say 33,000 + 7,750 = 40,750 and choose A.

    Exam:I'm done 🙂 🙂 🙂
    REG - 71 (2/22/14); 67 (4/3/14); 74 (8/29/15); 83 (2/29/16)!!!
    BEC - 72 (5/24/14); 85 (1/3/15)!!!!
    AUD - 72 (8/23/14); 76 (10/15/14)!!!
    FAR - 77 (5/26/15)!!!

    Started in 2013 using Kaplan and failed REG, REG, BEC, AUD. Switched to NINJA suite in Sept 2014 and passed AUD...then BEC...then FAR!
    REG took 2 tries but I finally got it in too!
    I'm a hard convert - Using NINJA method with NINJA video/book/notes/MCQ

    Education: Check
    Experience: 3 months left! I hit 4 years on May 30 🙂

    January 1, 2015 at 5:58 pm #655458
    Anonymous
    Inactive

    @Angel – (A)

    When there's capacity you're only taking variable costs into consideration — which are your relevant costs. As @JS mentioned above your other costs are fixed and thus sunk, so there's nothing you can do about it now.

    33,000 + 7,750 = (A)

    January 1, 2015 at 6:03 pm #655459
    Anonymous
    Inactive

    Yep. It's A.

    That's one of the “wordy” Becker questions that I hate.

    January 1, 2015 at 6:16 pm #655460
    Anonymous
    Inactive

    That's actually a short question. If you have Ninja MCQ you will see some that you have to scroll down and have multiple tables. Are you already in review stage @Angel?

    January 1, 2015 at 6:19 pm #655461
    Anonymous
    Inactive

    Yeah, I started my review a day or so ago. I know my weakest areas are Cost Accounting and Financial Management (just like everyone else) so I'm going to be in review mode for awhile. Next week I'll apply for my NTS for BEC and REG as well (I need to take REG second quarter so I don't “waste” a test window so I might as well save a few bucks and apply for both at the same time).

    I'm still planning to take BEC end of January (despite what my sig says right now). I'm in no hurry to take it too soon. There's no way I could fit REG in this window so why even try? I'd rather feel as confident as possible for BEC and take REG next window with the same philosophy.

    January 1, 2015 at 6:23 pm #655462
    Anonymous
    Inactive

    Sounds like a plan. I actually wish I would have scheduled my exam for tomorrow instead of next Friday (7 days later). It's been slow at the office so I was able to progress in my review much faster than anticipated. I'm at that “ready” stage now and feel like I have the perfect balance of info in my head to tackle this thing. I swear I thought about moving it to tomorrow but that $85 fee deterred me.

    I'm trying not to get burnt out on working MCQs as I've done so many. Ninja MCQ is a great contrast to my CPAExcel primary material and asks questions in different formats that I would have never been able to answer had I not seen it on Ninja.

    January 1, 2015 at 6:46 pm #655463
    Tarheelgirl
    Member

    @Angelwatch – That was a great question. Thanks for posting that.

    FAR - 46, 79 (7/8/14)
    AUD - 56, 59, 2/23/15 3rd times a charm!
    BEC - 69, 74 Really??
    REG - April, I hope. Fingers crossed!

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