The Hindu Business Line : Coping with copying

MAY 2005 CA Final paper on cost management has a compulsory question carrying 16 marks. It begins thus: "Carlon Ltd makes and sells a single product, the unit specifications are as follows: Direct materials X 8 sq metre at Rs 40 per sq metre; machine time 0.6 running hours; machine cost per gross hour Rs 400; selling price Rs 1,000."

Now turn to page 918 of Colin Drury's Management & Cost Accounting, fifth edition (2000), from Taxmann. Problem No. 22.13 reads: "Calton Ltd make and sell a single product. The existing product unit specifications are as follows: Direct material X 8 sq metre at £4 per sq metre; machine time 0.6 running hours; machine cost per gross hour £40; selling price £100."

Read on from the ICAI's question paper, with its secret code LG: "Carlon Ltd requires to fulfil orders for 5,000 product units per period. There are no stock of product units at the beginning or end of the period under review. The stock level of material X remains unchanged throughout the period." Very much unchanged from what's in Drury's book, except that the grammar in the book is correct; it says, "There are no stocks... "

The question is `ACCA Level 2 Cost and Management Accounting II', marked with a * to indicate that a suggested solution is to be found in the "Students' Manual".

A sad reflection of the quality of paper setting by the premier accounting body, though ironically, the Carlon morphed into Calton problem is about `quality management'.

Watch this space for more!

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