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CPAwishful
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Joined: 09 Sep 2008
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Posted: 11 Jun 2009 at 21:20 \| IP Logged

I am getting SO CONFUSED btw. when to include SG&A costs in CM and when not to. In Becker, it illustrates on page B5-37 that included in variable costs used for the cont margin calc. you INCLUDE variable SG&A but in every darn calculation that I am doing in Gleim, I am getting the answer WRONG because they say to exclude SG&A from CM when using the variable costing approach.

Can someone PLEASE make this easier for an idiot like me to understand?????

Thanks!

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CPAwishful
FAR 8/28/08 76
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REG 1/17/09 79
BEC 4/11/09 61 devastated, retake 8/1/09 PASSED 76!!!!
licensed CPA, Texas

dark_man_usa
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Joined: 16 Feb 2008
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Posts: 145

Posted: 12 Jun 2009 at 01:33 \| IP Logged

CPAwishful wrote:

I am getting SO CONFUSED btw. when to include
SG&A costs in CM and when not to. In Becker, it illustrates on page B5-
37 that included in variable costs used for the cont margin calc. you
INCLUDE variable SG&A but in every darn calculation that I am doing in
Gleim, I am getting the answer WRONG because they say to exclude
SG&A from CM when using the variable costing approach.

Can someone PLEASE make this easier for an idiot like me to
understand?????

Thanks!

In variable costing method, all variable costs are included in the
calculation of C.M. including the VSG$A. I didn't use Gleim, but if it
excludes, this definitely wrong. The formula for variable costing method
is as follows,

Sales
(- ) variable costs (every variable cost it doesn't matter what type)
-----------------------------------------------
= CM
(-) Fix costs ( any type of fix costs, it doesn't matter what type)
---------------------------------------------
Net income

Please note that although Variable SG&A is included in the calculation of
C.M, this cost is not inventoribale or included in inventory. It is period
cost not product cost.

__________________
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CPAwishful
Major Contributor

Joined: 09 Sep 2008
Online Status: Offline
Posts: 297

Posted: 12 Jun 2009 at 12:20 \| IP Logged

THAT'S WHERE I WAS LOST AT..........."Please note that although Variable SG&A is included in the calculation of
C.M, this cost is not inventoribale or included in inventory. It is period
cost not product cost." I think that's why I was getting the questions wrong because they were asking for the INVENTORIABLE costs and I was including variable SG&A in that number and getting it wrong EVERY TIME!!

You are awesome dark man!

__________________
CPAwishful
FAR 8/28/08 76
AUD 11/1/08 81
REG 1/17/09 79
BEC 4/11/09 61 devastated, retake 8/1/09 PASSED 76!!!!
licensed CPA, Texas

dark_man_usa
Regular
Regular

Joined: 16 Feb 2008
Online Status: Offline
Posts: 145

Posted: 12 Jun 2009 at 13:07 \| IP Logged

CPAwishful wrote:

THAT'S WHERE I WAS LOST AT..........."Please note
that although Variable SG&A is included in the calculation of C.M, this cost
is not inventoribale or included in inventory. It is period cost not product
cost." I think that's why I was getting the questions wrong because they
were asking for the INVENTORIABLE costs and I was including variable SG&A
in that number and getting it wrong EVERY TIME!!

You are awesome dark man!

You're welcome!

__________________
REG: PASSED
AUD: PASSED
FAR: PASSED
BEC: Passed, Received June 13, 2009. GOD is great.

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