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Hello sir,
Sir I have problem in PAF co (12/13) past paper,
Sir I solved this question but there is one mistake common in all measure that I compare the material cost as a percentage of sales but in exame kit they compare directly material cost from one year to another, sir I dont know whether my comparison is right or not,
Forex,, sir this is my solution(( division S,, material cost percentage of sales is 9.6% in 20×2 and this decreased to 9.03% in 20×3 this shows good performance it might be due to purchase material at lesser price or bulk discount))
Sir but in past paper they compare the material cost of 20×2 to material cost in 20×3, and they told that material cost increase by 36%, so my comment and calculation is totally different from examiner, kindly guide me whether my comment and calculation will be acceptable or not,
Thank youI would have calculated the material cost as a % of sales as well, and that is fine – you would still get full marks for the calculations.
However, most of the marks in this question are for assessing the performance AND for stating what further information would be required, and you should still end up with the same comment as the examiner – i.e. on the face of it, it looks good, but if the increase revenue is due to services (which do not have a material cost) then maybe it is not good. Further information is required as to the split of revenue between products and services.
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