Page 1 of 4 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF PAKISTAN EXAMINERS’ COMMENTS SUBJECT Management Accounting SESSION Final Examination - Summer 2011 General The overall performance of the candidates was not up to the mark. Question 1, 2, 3 and 6 were relatively easy, however, the performance in these questions was quite average, whereas questions 4 and 5 were poorly performed. Some answer scripts reflected lack of maturity level needed at final stage of the examinations. Even at this stage many students are unable to understand the requirements of the question which are clearly mentioned. It was generally observed that students tried to apply standard formulas without comprehending the given situation. Question wise comments are given below: Q.1 This was a simple question and required computation of variances alongwith comments on the reasons for adverse variances and suggestions for the management. Majority of the students was able to calculate the variances correctly although the following errors were also witnessed in many answer scripts: • There were more than one method of arriving at the actual sales. Most of the students wrongly computed the actual sales because they presumed that sales quantity was evenly distributed between the three months. Consequently, the dependent variances could not be computed correctly. • While computing the material yield variances the students generally failed to compute the standard output from actual input although it was quite straightforward. • The frequency of errors was highest in case of labour variances. Lengthy calculations were made unnecessarily. For determining actual labour hours, weighted average rate of labour was computed whereas according to the information provided in the question the production was evenly distributed, hence actual wage rage could have been worked out by taking the simple average of the hourly wage rate i.e. (60 + 66 + 66) / 3 = 64. The actual labour hours could have been arrived at simply by dividing the actual cost with the wage rate of Rs. 64 per hour.