Cost and Management Accounting Model Test Paper - 6 (Questions) | Model Test Papers for CA Intermediate PDF Download

 Page 1


MODEL TEST PAPER 6 
INTERMEDIATE: GROUP – II 
PAPER – 4: COST AND MANAGEMENT ACCOUNTING 
Answers are to be given only in English except in the case of the candidates who 
have opted for Hindi medium. If a candidate has not opted for Hindi medium his/ 
her answer in Hindi will not be valued. 
Working notes should form part of the answer. 
Time Allowed – 3 Hours Maximum Marks – 100 
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
for 30 marks
3. Part II comprises questions which require descriptive type answers for 70
marks.
PART I – Case Scenario based MCQs 
Part I is compulsory. 
Write the most appropriate answer to each of the following multiple-
choice questions by choosing one of the four options given. All 
questions are compulsory. 
Case Scenario I 
XYZ Manufacturing Ltd. is a mid-sized enterprise that has established a strong 
reputation in the field of precision engineering. The company specializes in 
producing high-quality engineering components that meet the stringent 
requirements of various industries including automotive, aerospace, medical 
devices, and industrial machinery. With a commitment to precision and 
excellence, XYZ Manufacturing Ltd. has positioned itself as a reliable supplier 
of critical components that demand the highest levels of accuracy and durability. 
To maintain stringent control over its production costs and enhance cost 
efficiency, XYZ Manufacturing Ltd. operates under a standard costing system. 
This system plays a pivotal role in the company’s financial and operational 
management. Standard costing involves setting predetermined costs for each 
production element, including materials, labor, and overheads. These 
predetermined costs, known as standard costs, serve as benchmarks against 
which actual production costs are measured. 
Particulars Budgeted Data Actual Data 
Units Produced 10,000 units 9,500 units 
Fixed Overheads ? 20,00,000 ? 19,50,000 + ? 1,00,000 
(additional quality control cost for 
56
Page 2


MODEL TEST PAPER 6 
INTERMEDIATE: GROUP – II 
PAPER – 4: COST AND MANAGEMENT ACCOUNTING 
Answers are to be given only in English except in the case of the candidates who 
have opted for Hindi medium. If a candidate has not opted for Hindi medium his/ 
her answer in Hindi will not be valued. 
Working notes should form part of the answer. 
Time Allowed – 3 Hours Maximum Marks – 100 
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
for 30 marks
3. Part II comprises questions which require descriptive type answers for 70
marks.
PART I – Case Scenario based MCQs 
Part I is compulsory. 
Write the most appropriate answer to each of the following multiple-
choice questions by choosing one of the four options given. All 
questions are compulsory. 
Case Scenario I 
XYZ Manufacturing Ltd. is a mid-sized enterprise that has established a strong 
reputation in the field of precision engineering. The company specializes in 
producing high-quality engineering components that meet the stringent 
requirements of various industries including automotive, aerospace, medical 
devices, and industrial machinery. With a commitment to precision and 
excellence, XYZ Manufacturing Ltd. has positioned itself as a reliable supplier 
of critical components that demand the highest levels of accuracy and durability. 
To maintain stringent control over its production costs and enhance cost 
efficiency, XYZ Manufacturing Ltd. operates under a standard costing system. 
This system plays a pivotal role in the company’s financial and operational 
management. Standard costing involves setting predetermined costs for each 
production element, including materials, labor, and overheads. These 
predetermined costs, known as standard costs, serve as benchmarks against 
which actual production costs are measured. 
Particulars Budgeted Data Actual Data 
Units Produced 10,000 units 9,500 units 
Fixed Overheads ? 20,00,000 ? 19,50,000 + ? 1,00,000 
(additional quality control cost for 
56
1,000 units chosen on sample 
basis) 
Hours Worked 15,000 hours 14,250 hours 
Variable Overhead 
Rate 
? 50 per hour ? 50 per hour (first 10,000 hours)  
? 60 per hour (additional hours) 
Based on the given information, you are being required to answer the 
following questions (MCQs 1 to 5): 
1.  What is the Fixed Overhead Cost Variance for XYZ Manufacturing Ltd. in 
May 2024? 
(a)  ` 50,000 (A) 
(b)  ` 1,00,000 (A) 
(c)  ` 1,50,000 (A) 
(d)  ` 2,00,000 (A) 
2.  What is the Fixed Overhead Volume Variance for XYZ Manufacturing Ltd. 
in May 2024? 
(a)  ` 50,000 (F) 
(b)  ` 50,000 (A) 
(c)  ` 1,00,000 (F) 
(d)  ` 1,00,000 (A) 
3.  What is the Variable Overhead Efficiency Variance for XYZ Manufacturing 
Ltd. in May 2024? 
(a)  ` 37,500 (A) 
(b)  ` 42,500 (A) 
(c)  ` 0 
(d)  ` 25,000 (A) 
4.  What is the Variable Overhead Expenditure Variance for XYZ 
Manufacturing Ltd. in May 2024? 
(a)  ` 40,000 (A) 
(b)  ` 42,500 (A) 
(c)  ` 45,000 (A) 
(d)  ` 45,030 (A) 
5.  What is the Fixed Overhead Expenditure Variance for XYZ Manufacturing 
Ltd. in May 2024? 
(a)  ` 50,000 (F) 
(b)  ` 50,000 (A) 
(c)  ` 1,00,000 (F) 
(d)  ` 1,00,000 (A) (5 x 2 Marks)  
57
Page 3


MODEL TEST PAPER 6 
INTERMEDIATE: GROUP – II 
PAPER – 4: COST AND MANAGEMENT ACCOUNTING 
Answers are to be given only in English except in the case of the candidates who 
have opted for Hindi medium. If a candidate has not opted for Hindi medium his/ 
her answer in Hindi will not be valued. 
Working notes should form part of the answer. 
Time Allowed – 3 Hours Maximum Marks – 100 
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
for 30 marks
3. Part II comprises questions which require descriptive type answers for 70
marks.
PART I – Case Scenario based MCQs 
Part I is compulsory. 
Write the most appropriate answer to each of the following multiple-
choice questions by choosing one of the four options given. All 
questions are compulsory. 
Case Scenario I 
XYZ Manufacturing Ltd. is a mid-sized enterprise that has established a strong 
reputation in the field of precision engineering. The company specializes in 
producing high-quality engineering components that meet the stringent 
requirements of various industries including automotive, aerospace, medical 
devices, and industrial machinery. With a commitment to precision and 
excellence, XYZ Manufacturing Ltd. has positioned itself as a reliable supplier 
of critical components that demand the highest levels of accuracy and durability. 
To maintain stringent control over its production costs and enhance cost 
efficiency, XYZ Manufacturing Ltd. operates under a standard costing system. 
This system plays a pivotal role in the company’s financial and operational 
management. Standard costing involves setting predetermined costs for each 
production element, including materials, labor, and overheads. These 
predetermined costs, known as standard costs, serve as benchmarks against 
which actual production costs are measured. 
Particulars Budgeted Data Actual Data 
Units Produced 10,000 units 9,500 units 
Fixed Overheads ? 20,00,000 ? 19,50,000 + ? 1,00,000 
(additional quality control cost for 
56
1,000 units chosen on sample 
basis) 
Hours Worked 15,000 hours 14,250 hours 
Variable Overhead 
Rate 
? 50 per hour ? 50 per hour (first 10,000 hours)  
? 60 per hour (additional hours) 
Based on the given information, you are being required to answer the 
following questions (MCQs 1 to 5): 
1.  What is the Fixed Overhead Cost Variance for XYZ Manufacturing Ltd. in 
May 2024? 
(a)  ` 50,000 (A) 
(b)  ` 1,00,000 (A) 
(c)  ` 1,50,000 (A) 
(d)  ` 2,00,000 (A) 
2.  What is the Fixed Overhead Volume Variance for XYZ Manufacturing Ltd. 
in May 2024? 
(a)  ` 50,000 (F) 
(b)  ` 50,000 (A) 
(c)  ` 1,00,000 (F) 
(d)  ` 1,00,000 (A) 
3.  What is the Variable Overhead Efficiency Variance for XYZ Manufacturing 
Ltd. in May 2024? 
(a)  ` 37,500 (A) 
(b)  ` 42,500 (A) 
(c)  ` 0 
(d)  ` 25,000 (A) 
4.  What is the Variable Overhead Expenditure Variance for XYZ 
Manufacturing Ltd. in May 2024? 
(a)  ` 40,000 (A) 
(b)  ` 42,500 (A) 
(c)  ` 45,000 (A) 
(d)  ` 45,030 (A) 
5.  What is the Fixed Overhead Expenditure Variance for XYZ Manufacturing 
Ltd. in May 2024? 
(a)  ` 50,000 (F) 
(b)  ` 50,000 (A) 
(c)  ` 1,00,000 (F) 
(d)  ` 1,00,000 (A) (5 x 2 Marks)  
57
Case Scenario II 
A garment manufacturer has been producing and selling T-shirts exclusively for 
Indian market. His T-shirts are made of a specific material which is eco-friendly. 
It means that T-shirts are bio-degradable in soil after it becomes unsuitable for 
use. 
This invention has been applauded throughout the country. Owner, Vikas, 
registered for the patent rights for his invention so that no one else could use it.  
Vikas feels that this invention will also be liked in foreign markets, and thus plans 
to expand his business outside India. He feels that US market is the first foreign 
market he should tap into.  
Current cost structure (each T-shirt): 
Direct material     90 
Direct labour     60 
Special service     80 
(Used in T-shirt making, 50% fixed) 
Fixed overhead    50 
Administration overhead (fixed)  20 
Total cost per T-shirt          300 
(+) Profit margin            200 
Selling price in India           500 
There is no limitation of any resources in India. Vikas is able to sell 80,000  
T-shirts each year. He is currently working at 80% of his total capacity.  
After searching for potential customers in US, Vikas received an inquiry for 
30,000 units from a wholesale distributor in California. As per the inquiry, order 
will be placed if price per T-shirt is reasonable and the order has to be satisfied 
in full. 
Vikas decided to send a quote and the order was placed by the foreign client, 
on the same day. Vikas, without a second thought accepted the order, but did 
not feel the need to extend the manufacturing capacity; therefore he decided 
forgo a few Indian clients. 
This foreign order also required special packaging. It is spent at 20% of the total 
prime cost per T-shirt. The production was done quickly and foreign consignment 
was transported to custom port via services from a carriage agency. It charged 
` 80,000 for 1 truck, whose capacity was 500 kg, to transport whole of the 
consignment. Truck was 20% vacant after loading the consignment.  
Bill of lading was filed and a professional fee of ` 25,000 for filing this was paid 
to a Chartered accountant. Custom port also charged ` 80 per kg per day to 
handle the material, storing it in warehouse, and for loading the goods on ship.  
58
Page 4


MODEL TEST PAPER 6 
INTERMEDIATE: GROUP – II 
PAPER – 4: COST AND MANAGEMENT ACCOUNTING 
Answers are to be given only in English except in the case of the candidates who 
have opted for Hindi medium. If a candidate has not opted for Hindi medium his/ 
her answer in Hindi will not be valued. 
Working notes should form part of the answer. 
Time Allowed – 3 Hours Maximum Marks – 100 
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
for 30 marks
3. Part II comprises questions which require descriptive type answers for 70
marks.
PART I – Case Scenario based MCQs 
Part I is compulsory. 
Write the most appropriate answer to each of the following multiple-
choice questions by choosing one of the four options given. All 
questions are compulsory. 
Case Scenario I 
XYZ Manufacturing Ltd. is a mid-sized enterprise that has established a strong 
reputation in the field of precision engineering. The company specializes in 
producing high-quality engineering components that meet the stringent 
requirements of various industries including automotive, aerospace, medical 
devices, and industrial machinery. With a commitment to precision and 
excellence, XYZ Manufacturing Ltd. has positioned itself as a reliable supplier 
of critical components that demand the highest levels of accuracy and durability. 
To maintain stringent control over its production costs and enhance cost 
efficiency, XYZ Manufacturing Ltd. operates under a standard costing system. 
This system plays a pivotal role in the company’s financial and operational 
management. Standard costing involves setting predetermined costs for each 
production element, including materials, labor, and overheads. These 
predetermined costs, known as standard costs, serve as benchmarks against 
which actual production costs are measured. 
Particulars Budgeted Data Actual Data 
Units Produced 10,000 units 9,500 units 
Fixed Overheads ? 20,00,000 ? 19,50,000 + ? 1,00,000 
(additional quality control cost for 
56
1,000 units chosen on sample 
basis) 
Hours Worked 15,000 hours 14,250 hours 
Variable Overhead 
Rate 
? 50 per hour ? 50 per hour (first 10,000 hours)  
? 60 per hour (additional hours) 
Based on the given information, you are being required to answer the 
following questions (MCQs 1 to 5): 
1.  What is the Fixed Overhead Cost Variance for XYZ Manufacturing Ltd. in 
May 2024? 
(a)  ` 50,000 (A) 
(b)  ` 1,00,000 (A) 
(c)  ` 1,50,000 (A) 
(d)  ` 2,00,000 (A) 
2.  What is the Fixed Overhead Volume Variance for XYZ Manufacturing Ltd. 
in May 2024? 
(a)  ` 50,000 (F) 
(b)  ` 50,000 (A) 
(c)  ` 1,00,000 (F) 
(d)  ` 1,00,000 (A) 
3.  What is the Variable Overhead Efficiency Variance for XYZ Manufacturing 
Ltd. in May 2024? 
(a)  ` 37,500 (A) 
(b)  ` 42,500 (A) 
(c)  ` 0 
(d)  ` 25,000 (A) 
4.  What is the Variable Overhead Expenditure Variance for XYZ 
Manufacturing Ltd. in May 2024? 
(a)  ` 40,000 (A) 
(b)  ` 42,500 (A) 
(c)  ` 45,000 (A) 
(d)  ` 45,030 (A) 
5.  What is the Fixed Overhead Expenditure Variance for XYZ Manufacturing 
Ltd. in May 2024? 
(a)  ` 50,000 (F) 
(b)  ` 50,000 (A) 
(c)  ` 1,00,000 (F) 
(d)  ` 1,00,000 (A) (5 x 2 Marks)  
57
Case Scenario II 
A garment manufacturer has been producing and selling T-shirts exclusively for 
Indian market. His T-shirts are made of a specific material which is eco-friendly. 
It means that T-shirts are bio-degradable in soil after it becomes unsuitable for 
use. 
This invention has been applauded throughout the country. Owner, Vikas, 
registered for the patent rights for his invention so that no one else could use it.  
Vikas feels that this invention will also be liked in foreign markets, and thus plans 
to expand his business outside India. He feels that US market is the first foreign 
market he should tap into.  
Current cost structure (each T-shirt): 
Direct material     90 
Direct labour     60 
Special service     80 
(Used in T-shirt making, 50% fixed) 
Fixed overhead    50 
Administration overhead (fixed)  20 
Total cost per T-shirt          300 
(+) Profit margin            200 
Selling price in India           500 
There is no limitation of any resources in India. Vikas is able to sell 80,000  
T-shirts each year. He is currently working at 80% of his total capacity.  
After searching for potential customers in US, Vikas received an inquiry for 
30,000 units from a wholesale distributor in California. As per the inquiry, order 
will be placed if price per T-shirt is reasonable and the order has to be satisfied 
in full. 
Vikas decided to send a quote and the order was placed by the foreign client, 
on the same day. Vikas, without a second thought accepted the order, but did 
not feel the need to extend the manufacturing capacity; therefore he decided 
forgo a few Indian clients. 
This foreign order also required special packaging. It is spent at 20% of the total 
prime cost per T-shirt. The production was done quickly and foreign consignment 
was transported to custom port via services from a carriage agency. It charged 
` 80,000 for 1 truck, whose capacity was 500 kg, to transport whole of the 
consignment. Truck was 20% vacant after loading the consignment.  
Bill of lading was filed and a professional fee of ` 25,000 for filing this was paid 
to a Chartered accountant. Custom port also charged ` 80 per kg per day to 
handle the material, storing it in warehouse, and for loading the goods on ship.  
58
The shipping company, which was booked by Vikas for taking the consignment 
to US, got delayed due to bad weather. Stock was held at port for 5 days and on 
6
th
 day it was loaded on ship. Shipping company charged ` 2,800/ 10kg of goods. 
Insurance was charged flat at ` 1,11,000. 
There is no custom duty on such exports. 
Answer the following questions (MCQs 6 to 10): 
6. Vikas had sufficient funds in his hands but he still raised a short-term 
working capital loan @ 6.5% p.a. for the satisfaction of this foreign order 
because he found a one time investment opportunity which was giving him 
9.25% returns. Foreign order was accepted on 1
st
 June and loan was taken 
on the same day. Repayment of the loan will be made on 1
st
 September. 
Calculate net cash outflow due to this export order. Which of the following 
is correct? 
(a) ` 73,91,000 
(b) ` 75,47,750 
(c) ` 74,76,500 
(d) ` 71,06,000 
7. What would have been the minimum price that Vikas could have quoted per 
T-shirt in US dollars? (exchange rate on 1
st
 June, $1 = ` 83.86) 
(a) $ 4.23 
(b) $ 4.20 
(c) $ 4.17 
(d) $4.05 
8. Payment from foreign client was received on 8
th
 October when exchange 
rate was ` 86 for each US $. Calculate the profit earned from this export 
order if actual quoted price was $4.90 per T-shirt. Select the correct 
amongst following: 
(a) ` 40,65,500 
(b) ` 41,51,000 
(c) ` 39,94,250 
(d) ` 44,36,000 
9. What is the net cash Inflow from this export order? 
(a) ` 55,36,000 
(b) ` 51,65,500 
(c) ` 52,51,000 
(d) ` 50,94,250 
59
Page 5


MODEL TEST PAPER 6 
INTERMEDIATE: GROUP – II 
PAPER – 4: COST AND MANAGEMENT ACCOUNTING 
Answers are to be given only in English except in the case of the candidates who 
have opted for Hindi medium. If a candidate has not opted for Hindi medium his/ 
her answer in Hindi will not be valued. 
Working notes should form part of the answer. 
Time Allowed – 3 Hours Maximum Marks – 100 
1. The question paper comprises two parts, Part I and Part II.
2. Part I comprises Case Scenario based Multiple Choice Questions (MCQs)
for 30 marks
3. Part II comprises questions which require descriptive type answers for 70
marks.
PART I – Case Scenario based MCQs 
Part I is compulsory. 
Write the most appropriate answer to each of the following multiple-
choice questions by choosing one of the four options given. All 
questions are compulsory. 
Case Scenario I 
XYZ Manufacturing Ltd. is a mid-sized enterprise that has established a strong 
reputation in the field of precision engineering. The company specializes in 
producing high-quality engineering components that meet the stringent 
requirements of various industries including automotive, aerospace, medical 
devices, and industrial machinery. With a commitment to precision and 
excellence, XYZ Manufacturing Ltd. has positioned itself as a reliable supplier 
of critical components that demand the highest levels of accuracy and durability. 
To maintain stringent control over its production costs and enhance cost 
efficiency, XYZ Manufacturing Ltd. operates under a standard costing system. 
This system plays a pivotal role in the company’s financial and operational 
management. Standard costing involves setting predetermined costs for each 
production element, including materials, labor, and overheads. These 
predetermined costs, known as standard costs, serve as benchmarks against 
which actual production costs are measured. 
Particulars Budgeted Data Actual Data 
Units Produced 10,000 units 9,500 units 
Fixed Overheads ? 20,00,000 ? 19,50,000 + ? 1,00,000 
(additional quality control cost for 
56
1,000 units chosen on sample 
basis) 
Hours Worked 15,000 hours 14,250 hours 
Variable Overhead 
Rate 
? 50 per hour ? 50 per hour (first 10,000 hours)  
? 60 per hour (additional hours) 
Based on the given information, you are being required to answer the 
following questions (MCQs 1 to 5): 
1.  What is the Fixed Overhead Cost Variance for XYZ Manufacturing Ltd. in 
May 2024? 
(a)  ` 50,000 (A) 
(b)  ` 1,00,000 (A) 
(c)  ` 1,50,000 (A) 
(d)  ` 2,00,000 (A) 
2.  What is the Fixed Overhead Volume Variance for XYZ Manufacturing Ltd. 
in May 2024? 
(a)  ` 50,000 (F) 
(b)  ` 50,000 (A) 
(c)  ` 1,00,000 (F) 
(d)  ` 1,00,000 (A) 
3.  What is the Variable Overhead Efficiency Variance for XYZ Manufacturing 
Ltd. in May 2024? 
(a)  ` 37,500 (A) 
(b)  ` 42,500 (A) 
(c)  ` 0 
(d)  ` 25,000 (A) 
4.  What is the Variable Overhead Expenditure Variance for XYZ 
Manufacturing Ltd. in May 2024? 
(a)  ` 40,000 (A) 
(b)  ` 42,500 (A) 
(c)  ` 45,000 (A) 
(d)  ` 45,030 (A) 
5.  What is the Fixed Overhead Expenditure Variance for XYZ Manufacturing 
Ltd. in May 2024? 
(a)  ` 50,000 (F) 
(b)  ` 50,000 (A) 
(c)  ` 1,00,000 (F) 
(d)  ` 1,00,000 (A) (5 x 2 Marks)  
57
Case Scenario II 
A garment manufacturer has been producing and selling T-shirts exclusively for 
Indian market. His T-shirts are made of a specific material which is eco-friendly. 
It means that T-shirts are bio-degradable in soil after it becomes unsuitable for 
use. 
This invention has been applauded throughout the country. Owner, Vikas, 
registered for the patent rights for his invention so that no one else could use it.  
Vikas feels that this invention will also be liked in foreign markets, and thus plans 
to expand his business outside India. He feels that US market is the first foreign 
market he should tap into.  
Current cost structure (each T-shirt): 
Direct material     90 
Direct labour     60 
Special service     80 
(Used in T-shirt making, 50% fixed) 
Fixed overhead    50 
Administration overhead (fixed)  20 
Total cost per T-shirt          300 
(+) Profit margin            200 
Selling price in India           500 
There is no limitation of any resources in India. Vikas is able to sell 80,000  
T-shirts each year. He is currently working at 80% of his total capacity.  
After searching for potential customers in US, Vikas received an inquiry for 
30,000 units from a wholesale distributor in California. As per the inquiry, order 
will be placed if price per T-shirt is reasonable and the order has to be satisfied 
in full. 
Vikas decided to send a quote and the order was placed by the foreign client, 
on the same day. Vikas, without a second thought accepted the order, but did 
not feel the need to extend the manufacturing capacity; therefore he decided 
forgo a few Indian clients. 
This foreign order also required special packaging. It is spent at 20% of the total 
prime cost per T-shirt. The production was done quickly and foreign consignment 
was transported to custom port via services from a carriage agency. It charged 
` 80,000 for 1 truck, whose capacity was 500 kg, to transport whole of the 
consignment. Truck was 20% vacant after loading the consignment.  
Bill of lading was filed and a professional fee of ` 25,000 for filing this was paid 
to a Chartered accountant. Custom port also charged ` 80 per kg per day to 
handle the material, storing it in warehouse, and for loading the goods on ship.  
58
The shipping company, which was booked by Vikas for taking the consignment 
to US, got delayed due to bad weather. Stock was held at port for 5 days and on 
6
th
 day it was loaded on ship. Shipping company charged ` 2,800/ 10kg of goods. 
Insurance was charged flat at ` 1,11,000. 
There is no custom duty on such exports. 
Answer the following questions (MCQs 6 to 10): 
6. Vikas had sufficient funds in his hands but he still raised a short-term 
working capital loan @ 6.5% p.a. for the satisfaction of this foreign order 
because he found a one time investment opportunity which was giving him 
9.25% returns. Foreign order was accepted on 1
st
 June and loan was taken 
on the same day. Repayment of the loan will be made on 1
st
 September. 
Calculate net cash outflow due to this export order. Which of the following 
is correct? 
(a) ` 73,91,000 
(b) ` 75,47,750 
(c) ` 74,76,500 
(d) ` 71,06,000 
7. What would have been the minimum price that Vikas could have quoted per 
T-shirt in US dollars? (exchange rate on 1
st
 June, $1 = ` 83.86) 
(a) $ 4.23 
(b) $ 4.20 
(c) $ 4.17 
(d) $4.05 
8. Payment from foreign client was received on 8
th
 October when exchange 
rate was ` 86 for each US $. Calculate the profit earned from this export 
order if actual quoted price was $4.90 per T-shirt. Select the correct 
amongst following: 
(a) ` 40,65,500 
(b) ` 41,51,000 
(c) ` 39,94,250 
(d) ` 44,36,000 
9. What is the net cash Inflow from this export order? 
(a) ` 55,36,000 
(b) ` 51,65,500 
(c) ` 52,51,000 
(d) ` 50,94,250 
59
10. What is the Incremental benefit from this export order? 
(a) ` 19,94,250 
(b) ` 21,51,000 
(c) ` 20,65,500 
(d) ` 24,36,000 (5 x 2 Marks) 
11. The rate of change in the composition of employee force over the average 
number of employees for the year is computed as 9% under ‘separation 
method’. However, the same rate is computed as 15% and 30% under 
‘replacement method’ and ‘flux method’ respectively.  
 Considering the average number of employees on roll during the year as 
200, FIND OUT the number of employees - 
(i)  replaced, (ii) left and discharged and (iii) recruited and joined 
(a) Replaced- 18 employees, left and discharged- 30 employees and 
recruited & joined- 42 employees 
(b) Replaced- 30 employees, left and discharged- 42 employees and 
recruited & joined- 18 employees 
(c) Replaced- 30 employees, left and discharged- 18 employees and 
recruited & joined- 42 employees 
(d) Replaced- 42 employees, left and discharged- 18 employees and 
recruited & joined- 30 employees (2 Marks) 
12.  WHICH of the following item is not the cause of differences in Financial and 
Cost Accounts? 
(a) Income tax not treated in Cost Accounts  
(b) Dividends credited in Financial Accounts  
(c) Losses on the sale of investments not treated in Financial Accounts 
(d) Cost Accounts showing notional depreciation on the assets fully 
depreciated for which book value is nil (2 Marks) 
13. Mefttal Ltd. is currently operating at 60% of its total capacity which is 1.5 
times than the previous year. The total capacity of the company is 2,00,000 
units.   
 Other information relating to the production is provided below: 
(i) The total cost of production for the current year is ` 59,28,000, and 
for the previous year, it was ` 44,72,000.  
(iii) No changes are anticipated in the cost structure for the upcoming 
years. 
 Selling price is ` 52 per unit and is expected to remain the same in the 
coming years. 
60