Q.1

A large number of students performed rather poorly in spite of the fact that the question was quite simple. The unsatisfactory replies to Part (a) of the question are  attributable to the lack of basic knowledge of the concept of “contribution”. Those  students who could not  calculate the profit correctly were also unable to reconcile the same as was required in part (b). However, some students who replied correctly to part (a) could not answer part (b) because they did not fully comprehend the question. These students reconciled the profits under the two methods of costing  instead of reconciling the operating profit of the two quarters as required in the question.

Q.2

The replies to this question were quite satisfactory as 19% of the students were able to secure full marks. The errors which were commonly made by those who could not perform well were of two types, i) the products were ranked in terms of absolute margin instead of calculating contribution per unit of materials ABC and. ii) the cost of packaging materials such as cartons, bottles etc. for each unit of production were not calculated correctly.                             

Q.3

(a)

This was a simple question to assess the knowledge of a basic concept of cost accounting.   Consequently some of the students performed very well and scored high marks, whereas those who were not fully conversant with the basic  concepts, made various types of mistakes.                                

(b)

The four main types of standards i.e. basic, ideal, attainable and current standards were explained by very few students. Most of the students did not  even attempt  to answer this question.            

Q.4

This question relating to calculation of working capital requirements was quite simple, but the replies were not wholly satisfactory. The typical   mistakes were:           

(i)

While converting tons into bags and kgs, conversion of one ton was  erroneously calculated as being equivalent to 40, 50 and 100 kgs. instead of 1000 kgs.                   

(ii)

Packing material cost was included as a component  of work-in progress.         

(iii)

Fuel costs were considered as material costs instead of conversion costs.

(iv)

Depreciation which is a non-cash item, was not excluded from the computation of working capital requirements.                                       

(v)

The calculation of working capital requirements for receivables was based on invoice price.Net Profits and non-cash depreciation should have been deducted from the invoice value while determining the net working capital requirements.   

Q.5

The replies to this question were satisfactory as over 75% of the students obtained passing marks. However, some of the students were unable to correctly calculate the probabilities relating to the variations in the weather conditions.

Q.6

The replies to the question on standard costing were highly unsatisfactory. The students were required to prepare a reconciliation statement of profits on the basis of inputs at standard costs and actual costs It appears that the students were not prepared for this type of question as most of them were aware of the formulas without having the conceptual understanding of the relationship between the  standard costs and actual costs and calculation of the variances.   

Q.7

(a)

This question relating to the concept of Total Quality Management (TQM)  was also very poorly attempted. As many as 36% of the students did not attempt the question and only 8% of the candidates could secure passing marks. Only few students were able to identify all the four types of quality costs viz. Internal Failure Costs, External Failure Costs, Appraisal Costs and Prevention Costs.   

(b)

In Part (b) of the question, only few students could mention some of the benchmarks used for measuring quality such as number of rejections, number of complaints, response time, etc.