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PCC Costing Solution - MAy 2011

daVe.. (Student) (1431 Points)

08 May 2011

Hi Friends, Can you please help me with this doubt. My friend had his PCC costing paper yesterday. He needs the right solution for Question No. 2 B

The mistake he has done is he took Variable Cost as cost of Debtors instead of Total cost (VC + FC). However there is net benefit in both case

Can you please tell me if the problem step marks will be given? How many marks will be deducted? Your help will be appreciated. Thanks!

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11 Replies

vishnu (ca final) (174 Points)
Replied 08 May 2011

will lose 3 marks

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Manthan (CA-FINAL) (28 Points)
Replied 11 May 2011

I DONT THINK D ANSWER GIVEN BY MR. DAVE IS CORRECT AS WE HAVE TO CONSIDER ONLY VARIABLE COST WHILE CALCULATING INTEREST ON DEBTORS..... I TOO HAVE DONE D SAME THING PLZ CONFIRM......

THANKS

SARAVANAN (CA PCC) (47 Points)
Replied 13 May 2011

We should consider fixed cost in determining debtors

Rahul (2nd group pending) (97 Points)
Replied 17 May 2011

As per my knowledge to calculate the interest on Debtors Fixed cost and Variable Cost both sould be considered and as per the query i think you can expect 4 out of 8. But being practical you might get less than that because there would be mistakes in the step also. your total would be wrong, calculation of interest would be wrong, etc. Marks can be obtained if at all the invigilator thinks that your concept is right and you made mistake in Calculation. But in your case calculation is right but Concept is wrong. Dont want to de-motivate you. Hope you get more than 4.