The Hindu Business Line : You can't fake quality

THE global counterfeit business is out of control, targeting everything from computer chips to life-saving medicines, screamed a story posted on www.businessweek.com a few months ago. "Kiwi shoe polish, Callaway Golf clubs, Intel computer chips, Bosch power drills, BP oil. Pick any product from any well-known brand, and chances are there's a counterfeit version of it out there."

To that list, you may add ACCA's Level 2 Management Accounting problems too, because the latest CA Final paper on Cost Management had a 11-mark question that had all the semblance of a 12-mark poser in the original. Question 4(c) reads thus: "R Ltd has spare capacity in two of its manufacturing departments — Department 4 and Department 5. A five-day week of 40 hours is worked, but there is only enough internal work for 3 days per week so that that 2 days per week (16 hours) could be available in each department. R Ltd has sold this time to another manufacturer, but there is some concern about the profitability of this work."

Turn now to page 329 of Colin Drury's Management & Cost Accounting, fifth edition (2000), from Taxmann and see problem number 9.30. It begins thus: "Rosehip has spare capacity... " Limited change, you'd notice, and again with an exchange rate of £1= Re 1, the only change the paper setter had to do was to indicate the appropriate currency. "The labour force is paid on a time basis and there is no change in the weekly wage bill whether or not the plant is working at full capacity," continues the Rosehip story. "The labour is paid on a time basis and there is no charge in the weekly wage bill... " reads the R Ltd story, mysteriously making a charge out of change.

"You can't fake quality any more than you can fake a good meal," cautions William S. Burroughs. But there is a clue from Groucho Marx — "The secret of life is honesty and fair dealing. If you can fake that, you've got it made." And to ACCA there is comfort in what James Hetfield said — that when people start copying your style, you know that something must be happening.

RootOfTheProblem@rediffmail.com

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