Part of the CPA Exam Blueprint for BEC requires writing skills. The AICPA calls it written communication. Darius Clark, the best CPA Exam Tutor, suggests to his students to practice for the written communication by “compare and contrast”. Look, take two related BEC topics such as “direct costing” and “full absorption costing” and write a memo to your supervisor, comparing and contrasting them.  Why is this so important? Look, this exercise will force a CPA Candidate to develop the writing skills required to pass BEC. Comparing two concepts that are tested together on the CPA Exam such as “direct costing” and “full absorption costing” is a good place to start. What does this mean? Begin by writing about how “direct costing” is used internally for decision making such as break-even analysis and how direct costing includes only variable product costs in ending inventory but all fixed costs would be expensed in the period incurred. Then go on to write about how full absorption costing is approved by US GAAP for external reporting purposes because all product costs, fixed and variable, remain in inventory until the product is sold. Make sure to express a conclusion such as, the biggest difference between direct costing and full absorption costing is the treatment of fixed overhead, how full absorption costing treats fixed overhead as a product cost but variable costing treats fixed overhead as a period cost. Here’s the best part, there are many other BEC topics that you can use this plan to practice with including “Product Cost vs Period Cost”,  “Job Order Costing vs Process Costing”,  “Operating Leverage vs Financial  Leverage”,  conformance costs vs non-conformance costs… Bottom line, not only will this exercise help your written communication skills but it will also improve your understanding of the topics that you write about in case you get a simulation or m/c question.

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