pathfinder - The Institute of Chartered Accountants of Nigeria

PATHFINDER40,000 15,000 5,000BAK II – 5,000BAK I – 3,000 15,000 - 1,875BAK III – 3,5000 - - -BAK III will not be produced.BAK I will be bought out first because only 1,875 units were produced out of 3,000units demanded.(d) Computation of Net Profit:Maximum UnitsMachineHoursMachineHoursProductionbased onRequired Available HoursAvailableBAK II – 5,000 40,000 15,000 5,000BAK I – 3,000 15,000 - 1,875BAK III – 3,5000 - - -EXAMINERS‟ REPORTThe question tests candidates‟ ability to make informed business managementdecision using Marginal Costing Approach.Question appears very unpopular among candidates. About 15% of the candidatesattempted the question.Performance was very poor as only about 20% of the candidates who attempted thequestion scored 30% and above.Major shortcomings noticed were as follows: Candidates exhibited insufficient familiarity with decision making scenarios. Inability to recognize relevant costs in decision making situations.It is recommended that: Candidates should read and digest costing topics on decision making.Candidates should increase the length of time spent on preparation, improve onquality of texts and tuition.INTERMEDIATE EXAMINATION - NOVEMBER 201024