BEC Study Group 2019

This topic contains 212 replies, has 83 voices, and was last updated by  BEC Savvy 3 weeks, 5 days ago.

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  • #2498187

    Terre Paul
    Participant

    don't give up momonthemove, your family's faith is riding on yours. i dreaded losing credit, so i feel for you. but dont let the scope of the challenge scare you off. refocus on BEC. 1 CHALLENGE AT A TIME. YOU CAN DO IT!

    Sent from my Sprint Samsung Galaxy S8.

    AUD - 86
    BEC - 81
    FAR - 81
    REG - 77
    The race is not given to the swift or strong, but to him that perseveres to the end.
    #2498439

    MomOnTheMove
    Participant

    Thanks so much for the encouraging words. It helps more than you know.

    Yes, let’s do this:-)

    FAR 64, 78 (Dec 2017 exp)

    REG 77 (Jun 2018)

    AUD 73, 80 (Dec 18)

    BEC 67, 73

    #2505774

    BEC Savvy
    Participant

    Hi everyone,

    Can someone please help me with figuring out this part of the following TBS: How did we calculate the 25 DLH from the information given blow, resulting in $818.75 cost per unit & $2,046,875 per 2500 units ?

    “If the company outsources the production of V-4 engines, Alcatara is exploring other options. One of the options the company is considering is to rent out the space to another entity for $500,000 per month. The company is also considering using the space to produce an electric motorcycle motor. The incremental revenue and costs per unit of the new motor are as follows:

    Incremental revenue $6,000.00
    Direct materials 2,732.00
    Direct labor 675.00
    Variable Overhead 32.75 per Direct Labor Hour
    Traceable fixed costs 403.20 (assumes 2,500 units)
    Common fixed costs 992,000.00 per month

    Answer:
    The potential opportunity costs would be the rental income of $500,000 per month or the segment margin of proposed new products to be made, whichever is greater. The segment margin would be calculated as follows:

    Opportunity Costs Per Unit 2500 units
    Incremental Revenues $6,000 $15,000,000
    Incremental Variable Costs
    Direct Materials 2,732 6,830,000
    Direct Labor 675 1,687,500
    Variable Overhead (25 DLH × $32.75) 818.75 2,046,875

    Total Variable Costs 4,225.75 10,564,375
    Contribution Margin 1,774.25 4,435,625
    Traceable Fixed Costs 403.20 1,008,000
    Segment Margin 1,371.05 3,427,625

    The monthly segment margin exceeds the rental income and would be the opportunity cost.

    Thanks!

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