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problem with answers of RTP of nov 10 old course help!

ca pratibha bansal (ca) (94 Points)

16 October 2010

I m having problem with answers of costing of RTP Nov 10 has anyone solved it n can someone help me ?

the prob is with first sum n simplex prob

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14 Replies

CA bhargava (CA) (2017 Points)
Replied 17 October 2010

Regarding the simplex problem the ans given is correct as per my calculation....

Can i know where is the doubt there...

What is the query in both the problems.

ca pratibha bansal (ca) (94 Points)
Replied 17 October 2010

Basically i didnt receive 5/9 in second row n in prob no 1 the doubts are as follows:

(ii) the export order is for 100% capacity n statement is made for existing capacity @ 8100 also the direct wages are taken @ 1800 which are 2100 as given n the net price realisation per unit of export order (price-shipment cost) it should be 1800-25 na why they ve taken 1800-50 which results 1750

CA bhargava (CA) (2017 Points)
Replied 17 October 2010

First, the first problem....The export order is for .5 lakh units making it to total....100% of the capacity that is 5 lac .(4.5+.5)

And the SP per unit is 1800, before modification, and that of Export order receipt is per unit Rs1800-(25lac/50000units)=1800-50=1750/-,though here the shipment is fixaed , the net ralisation is expressed in this form.

And the labour here is fixed but not variable, it is given 200/-per day not per unit...it is given for confusing....

CA bhargava (CA) (2017 Points)
Replied 17 October 2010

and regardin 5/9,

, first in the given R3(row three)=R3*8/27,

then R2(s2 row)=R2+1/8R3

if u want i will attach a excel working.....

CA bhargava (CA) (2017 Points)
Replied 17 October 2010

the working is unable to upload.....

if u want mail me u r ID ....

ca pratibha bansal (ca) (94 Points)
Replied 17 October 2010

my email id is pritu_b @ yahoo.co.in

ca pratibha bansal (ca) (94 Points)
Replied 17 October 2010

also i knw labour is fixed n it amounts to 2100 how come 1800 is taken? that is wat my doubt is?

CA bhargava (CA) (2017 Points)
Replied 17 October 2010

Yes.... u r right, there is a difference of Rs.300lacs in the solution, more over the profit which he has obtained in 790lacs, but it is indeed 490 lacs, there i mistake in the problem, and more over , the labour here is fixed, he has taken as variable , which is entirely wrong.

CA Sonia Narang (Deputy Manager- Audit) (62 Points)
Replied 19 October 2010

i m not able to get RTP for nov 2010 exams for final. can anyone help me out for the same. If anyone has plz mail me on sonianarang200 @ gmail.com

ca pratibha bansal (ca) (94 Points)
Replied 20 October 2010

sonia u want RTP for old course or new course i ve of old course n its availale on this site https://www.icai.org/post.html?post_id=5769

shital (Chartered Accountant ) (67 Points)
Replied 01 November 2010

I have problem In CA final RTP MAFA (SFM ) q. no.12 regarding option valutaion ... how valu have been derived Of Rs. 715/- and 20/- and also Doubt in Q. 18 can ny body explain..?

CA bhargava (CA) (2017 Points)
Replied 01 November 2010

here the value obtained

715=Spot price( if increases) 880-option price 165

20=22/1.1(value of option if price increases after decrease in the value of share price)

22=.4*55

if u still did not get it u can ask additional clarification....

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shital (Chartered Accountant ) (67 Points)
Replied 02 November 2010

Thanks Bhargav, But Will u plz explain/elobrate more as i m still not much clear

CA bhargava (CA) (2017 Points)
Replied 03 November 2010

then starting with the probability ratio....., the formula is .,

let 1 be the spot share price and if increases then it becomes 2(1+1)

if decreases then the price becomes .5(1-.5)then

let p be the probability of increase then (1-p) be probability of decrease

therefor under risk neutral ....

p*2 +(1-P)*.5=1.1 here 1.1= the fair return for the six month 20% p.a =10% for 6 month.....(this was done differently in the RTP)

then we get p=.4 which is the probability to increase and .6 to decrease.....

know coming to the calculation part....

the value of the option is 165 , then the intrinsic value at 880=880-165=715, and correspondingly if it is 220=220-165=55 , then the value of option if increases after 6months =.4*715+.6*55/1.1=290

correspondingly if decreses=.4*55+.6*0/1.1 = 20

know the present value of the option know after six months =.4*290+.6*20/1.1 = 116.36

therefore the value of the option is 116.36

if u still have any doubt ...where is it....

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