The Hindu Business Line : Easy, but time consuming

Q1(a): There is a mistake in part (ii) of this question on activity-based costing. It should have been “cleaning and maintenance cost as direct...” instead of “indirect”.

Q1(d): An easy question on Halsey and Rowan plans.

Q2(a): A good question on product cost-sheet. Students should consider the quantity increase also while working out the cost of production.

Q3(a): An easy question on under-absorption of overheads.

Q4(a): This involves preparation of three cost control accounts, a financial profit and loss (P&L) account and a reconciliation statement. An easy but time-consuming problem.

Q5(a): Involves ascertaining the amount of profit on incomplete contract and how much is to be transferred to P&L account. A pretty an ordinary question on contract account.

Q6(a): This is on financing option of the project and point of indifference. One option is debt-equity ratio of 2:1. The other option is not mentioned in the question, hence the point of indifference cannot be calculated.

Q6(b): An easy question on cash-flow statement.

Q7(a): On NPV and IRR. The May 1995 CA (Final) paper had a similar question.

Q8(a): Involves calculation of working capital requirement and MPBF as per the Tandon Committee guidelines.

Q9(a): Involves calculation of EPS under four financial plans and also the degree of financial leverage in each plan.

In all, the theory questions in the paper are easy and direct. But three hours may not have been enough to finish the paper.

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