The Hindu Business Line : Balanced and conceptual

Compared to the last 10 papers, the recent paper on cost management can be considered well-balanced. The mix of problems and theory is 76-24 to 67-33, in terms of possible marks. The questions are quite interesting, with a clear focus on the concepts. The paper has its share of unconventional questions, but not so much as to affect the average student.

Comments

Q1(a): This tests the candidates’ understanding of high-low method for splitting the total overheads into variable and fixed elements, with adjustment for inflation. This is based on a question asked in CIMA earlier, with appropriate and intelligent modification. It is interesting to note that there is no change in the break-even sales value.

Q1(b): This would have been a surprise for most of the students, as this is the first time a question on resource allocation is being asked in the current syllabus.

Q2(b): A simple and straight forward question on variance analysis.

Q2(c): An intelligent question on the application of learning curve.

Q3(a): On transfer pricing, this is perhaps the toughest question. A bit lengthy from the exam perspective.

Q4(a): A simple and straightforward question on activity-based costing with some good adjustments.

Q5(a): Formulation of a linear programming model based on a study material example.

Q6(a): An intelligent question testing the students’ grasp of the North-West corner rule as well as Vogel’s approximation method in transportation. A typo error, however, seems to have crept in; instead of ‘optimal’, the word ‘optional’ was printed.

Q6(b): Preparation of income statement with respect to a restaurant with a decision emphasis. A similar question had been asked earlier and is also there in the study material.

As regards theory questions, all of them were direct and straight-forward based on the study material.

For a student who had focussed on both the study-material and the prescribed textbooks, the paper should have been quite easy.

On the whole, the paper is one of the best in recent times.

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