Cost and Management Accounting Model Test Paper - 2 (Questions) | Model Test Papers for CA Intermediate PDF Download

 Page 1


 
MODEL TEST PAPER 2 
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. 
1. A meeting of the heads of departments of the Arnav Ltd. has been called to 
review the operating performance of the company in the last financial year. 
The head of the production department appraised that during the last year the 
company could operate at 70% capacity level but in the coming financial year 
95% capacity level can be achieved if an additional amount of `100 Crore on 
capex and working capital is incurred.  
 The head of the finance department has presented that during the last 
financial year the company had a P/V ratio of 40%, margin of safety and the 
break-even were `50 crore and `200 crore respectively.  
 To the reply to the proposal of increasing the production capacity level to 95%, 
the head of the finance department has informed that this could be achieved 
if the selling price and variable cost are reduced by 8% and 5% of sales 
respectively. Fixed cost will also increase by `20 crore due to increased 
depreciation on additional assets. The additional capital will be arranged at a 
cost of 15% p.a. from a bank. 
 In the coming financial year, it has been aimed to achieve an additional profit 
of `10 crore over and above the last year’s profit after adjusting the interest 
cost on the additional capital.  
 The following points is required to be calculated on urgent basis to put the 
same in the meeting. You being an assistant to the head of finance, has been 
asked the followings: 
i.  What will be the revised sales for the coming financial year? 
A.   ` 322.22 Crore  
12
Page 2


 
MODEL TEST PAPER 2 
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. 
1. A meeting of the heads of departments of the Arnav Ltd. has been called to 
review the operating performance of the company in the last financial year. 
The head of the production department appraised that during the last year the 
company could operate at 70% capacity level but in the coming financial year 
95% capacity level can be achieved if an additional amount of `100 Crore on 
capex and working capital is incurred.  
 The head of the finance department has presented that during the last 
financial year the company had a P/V ratio of 40%, margin of safety and the 
break-even were `50 crore and `200 crore respectively.  
 To the reply to the proposal of increasing the production capacity level to 95%, 
the head of the finance department has informed that this could be achieved 
if the selling price and variable cost are reduced by 8% and 5% of sales 
respectively. Fixed cost will also increase by `20 crore due to increased 
depreciation on additional assets. The additional capital will be arranged at a 
cost of 15% p.a. from a bank. 
 In the coming financial year, it has been aimed to achieve an additional profit 
of `10 crore over and above the last year’s profit after adjusting the interest 
cost on the additional capital.  
 The following points is required to be calculated on urgent basis to put the 
same in the meeting. You being an assistant to the head of finance, has been 
asked the followings: 
i.  What will be the revised sales for the coming financial year? 
A.   ` 322.22 Crore  
12
 
B.  ` 311.11 Crore 
C.  ` 300.00 Crore 
D.  ` 324.24 Crore 
ii.  What will be the revised break-even point for the coming financial year? 
A.  ` 222.22 Crore 
B.  ` 252.22 Crore 
C.  ` 244.44 Crore 
D.  ` 255.56 Crore 
iii.  What will be the revised margin of safety for the coming financial year? 
A.  ` 100 Crore 
B.  ` 58.89 Crore 
C.  ` 55.56 Crore 
D.  ` 66.66 Crore 
iv.  The profit of the last year and for the coming year are: 
A.  ` 50 Crore & `95 Crore respectively 
B.  ` 20 Crore & ` 65 Crore respectively 
C.  ` 20 Crore & ` 30 Crore respectively 
D.  ` 45 Crore & ` 66.66 Crore respectively 
v.  The total cost of the last year and for the coming year are: 
A.  ` 230 Crore & `292.22 
B.  ` 230 Crore & `275 Crore 
C.  ` 220 Crore & `282.22 Crore 
D. ` 220 Crore & `292.22 Crore       (5 x 2 = 10 Marks) 
2. K Ltd. is a manufacturer of a single product A. 8,000 units of the product A 
has been produced in the month of March 2024. At the beginning of the year 
a total 1,20,000 units of the product-A has been planned for production. The 
cost department has provided the following estimates of overheads:  
Fixed ` 12,00,000 Variable  ` 6,00,000 
Semi-Variable ` 1,80,000   
 Semi-variable charges are considered to include 60 per cent expenses of 
fixed nature and 40 per cent of variable character. 
 The records of the production department shows that the company could have 
operated for 20 days but there was a festival holiday during the month. 
 
 
13
Page 3


 
MODEL TEST PAPER 2 
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. 
1. A meeting of the heads of departments of the Arnav Ltd. has been called to 
review the operating performance of the company in the last financial year. 
The head of the production department appraised that during the last year the 
company could operate at 70% capacity level but in the coming financial year 
95% capacity level can be achieved if an additional amount of `100 Crore on 
capex and working capital is incurred.  
 The head of the finance department has presented that during the last 
financial year the company had a P/V ratio of 40%, margin of safety and the 
break-even were `50 crore and `200 crore respectively.  
 To the reply to the proposal of increasing the production capacity level to 95%, 
the head of the finance department has informed that this could be achieved 
if the selling price and variable cost are reduced by 8% and 5% of sales 
respectively. Fixed cost will also increase by `20 crore due to increased 
depreciation on additional assets. The additional capital will be arranged at a 
cost of 15% p.a. from a bank. 
 In the coming financial year, it has been aimed to achieve an additional profit 
of `10 crore over and above the last year’s profit after adjusting the interest 
cost on the additional capital.  
 The following points is required to be calculated on urgent basis to put the 
same in the meeting. You being an assistant to the head of finance, has been 
asked the followings: 
i.  What will be the revised sales for the coming financial year? 
A.   ` 322.22 Crore  
12
 
B.  ` 311.11 Crore 
C.  ` 300.00 Crore 
D.  ` 324.24 Crore 
ii.  What will be the revised break-even point for the coming financial year? 
A.  ` 222.22 Crore 
B.  ` 252.22 Crore 
C.  ` 244.44 Crore 
D.  ` 255.56 Crore 
iii.  What will be the revised margin of safety for the coming financial year? 
A.  ` 100 Crore 
B.  ` 58.89 Crore 
C.  ` 55.56 Crore 
D.  ` 66.66 Crore 
iv.  The profit of the last year and for the coming year are: 
A.  ` 50 Crore & `95 Crore respectively 
B.  ` 20 Crore & ` 65 Crore respectively 
C.  ` 20 Crore & ` 30 Crore respectively 
D.  ` 45 Crore & ` 66.66 Crore respectively 
v.  The total cost of the last year and for the coming year are: 
A.  ` 230 Crore & `292.22 
B.  ` 230 Crore & `275 Crore 
C.  ` 220 Crore & `282.22 Crore 
D. ` 220 Crore & `292.22 Crore       (5 x 2 = 10 Marks) 
2. K Ltd. is a manufacturer of a single product A. 8,000 units of the product A 
has been produced in the month of March 2024. At the beginning of the year 
a total 1,20,000 units of the product-A has been planned for production. The 
cost department has provided the following estimates of overheads:  
Fixed ` 12,00,000 Variable  ` 6,00,000 
Semi-Variable ` 1,80,000   
 Semi-variable charges are considered to include 60 per cent expenses of 
fixed nature and 40 per cent of variable character. 
 The records of the production department shows that the company could have 
operated for 20 days but there was a festival holiday during the month. 
 
 
13
 
The actual cost data for the month of March 2024 are as follows: 
Fixed ` 1,19,000 Variable  ` 48,000 
Semi-Variable ` 19,200   
 The cost department of the company is now preparing a cost variance report 
for managerial information and action. You being an accounts officer of the 
company are asked to calculate the following information for preparation of 
the variance report:  
i.  What is the amount of variable overhead cost variance for the month of 
March 2024: 
A.  ` 10,200 (A)  
B.  ` 10,400 (A) 
C.  ` 10,800 (A) 
D.  ` 10,880 (A) 
ii.  What is the amount of fixed overhead volume variance for the month of 
March 2024: 
A.  ` 9,000 (F) 
B.  ` 9,000 (A) 
C.  ` 21,800 (A) 
D.  ` 11,000 (A) 
iii.  What is the amount of fixed overhead expenditure variance for the month 
of March 2024: 
A.  ` 21,520 (A) 
B.  ` 21,500 (A) 
C.  ` 21,400 (A) 
D.  ` 21,480 (A) 
iv.  What is the amount of fixed overhead calendar variance for the month of 
March 2024: 
A.  ` 5,400 (A) 
B.  ` 5,450 (A) 
C.  ` 5,480 (A) 
D.  ` 5.420 (A) 
v.  What is the amount of fixed overhead cost variance for the month of 
March 2024: 
A.  ` 43,320 (A) 
B.  ` 43,300 (A) 
C.  ` 43,200 (A) 
14
Page 4


 
MODEL TEST PAPER 2 
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. 
1. A meeting of the heads of departments of the Arnav Ltd. has been called to 
review the operating performance of the company in the last financial year. 
The head of the production department appraised that during the last year the 
company could operate at 70% capacity level but in the coming financial year 
95% capacity level can be achieved if an additional amount of `100 Crore on 
capex and working capital is incurred.  
 The head of the finance department has presented that during the last 
financial year the company had a P/V ratio of 40%, margin of safety and the 
break-even were `50 crore and `200 crore respectively.  
 To the reply to the proposal of increasing the production capacity level to 95%, 
the head of the finance department has informed that this could be achieved 
if the selling price and variable cost are reduced by 8% and 5% of sales 
respectively. Fixed cost will also increase by `20 crore due to increased 
depreciation on additional assets. The additional capital will be arranged at a 
cost of 15% p.a. from a bank. 
 In the coming financial year, it has been aimed to achieve an additional profit 
of `10 crore over and above the last year’s profit after adjusting the interest 
cost on the additional capital.  
 The following points is required to be calculated on urgent basis to put the 
same in the meeting. You being an assistant to the head of finance, has been 
asked the followings: 
i.  What will be the revised sales for the coming financial year? 
A.   ` 322.22 Crore  
12
 
B.  ` 311.11 Crore 
C.  ` 300.00 Crore 
D.  ` 324.24 Crore 
ii.  What will be the revised break-even point for the coming financial year? 
A.  ` 222.22 Crore 
B.  ` 252.22 Crore 
C.  ` 244.44 Crore 
D.  ` 255.56 Crore 
iii.  What will be the revised margin of safety for the coming financial year? 
A.  ` 100 Crore 
B.  ` 58.89 Crore 
C.  ` 55.56 Crore 
D.  ` 66.66 Crore 
iv.  The profit of the last year and for the coming year are: 
A.  ` 50 Crore & `95 Crore respectively 
B.  ` 20 Crore & ` 65 Crore respectively 
C.  ` 20 Crore & ` 30 Crore respectively 
D.  ` 45 Crore & ` 66.66 Crore respectively 
v.  The total cost of the last year and for the coming year are: 
A.  ` 230 Crore & `292.22 
B.  ` 230 Crore & `275 Crore 
C.  ` 220 Crore & `282.22 Crore 
D. ` 220 Crore & `292.22 Crore       (5 x 2 = 10 Marks) 
2. K Ltd. is a manufacturer of a single product A. 8,000 units of the product A 
has been produced in the month of March 2024. At the beginning of the year 
a total 1,20,000 units of the product-A has been planned for production. The 
cost department has provided the following estimates of overheads:  
Fixed ` 12,00,000 Variable  ` 6,00,000 
Semi-Variable ` 1,80,000   
 Semi-variable charges are considered to include 60 per cent expenses of 
fixed nature and 40 per cent of variable character. 
 The records of the production department shows that the company could have 
operated for 20 days but there was a festival holiday during the month. 
 
 
13
 
The actual cost data for the month of March 2024 are as follows: 
Fixed ` 1,19,000 Variable  ` 48,000 
Semi-Variable ` 19,200   
 The cost department of the company is now preparing a cost variance report 
for managerial information and action. You being an accounts officer of the 
company are asked to calculate the following information for preparation of 
the variance report:  
i.  What is the amount of variable overhead cost variance for the month of 
March 2024: 
A.  ` 10,200 (A)  
B.  ` 10,400 (A) 
C.  ` 10,800 (A) 
D.  ` 10,880 (A) 
ii.  What is the amount of fixed overhead volume variance for the month of 
March 2024: 
A.  ` 9,000 (F) 
B.  ` 9,000 (A) 
C.  ` 21,800 (A) 
D.  ` 11,000 (A) 
iii.  What is the amount of fixed overhead expenditure variance for the month 
of March 2024: 
A.  ` 21,520 (A) 
B.  ` 21,500 (A) 
C.  ` 21,400 (A) 
D.  ` 21,480 (A) 
iv.  What is the amount of fixed overhead calendar variance for the month of 
March 2024: 
A.  ` 5,400 (A) 
B.  ` 5,450 (A) 
C.  ` 5,480 (A) 
D.  ` 5.420 (A) 
v.  What is the amount of fixed overhead cost variance for the month of 
March 2024: 
A.  ` 43,320 (A) 
B.  ` 43,300 (A) 
C.  ` 43,200 (A) 
14
 
D. ` 43,380 (A)    (5 x 2 = 10 Marks) 
3. If the amount of wages under Halsey plan is ` 420, total time allowed is 8 
hours and the guaranteed time rate is ` 60 per hour. What is the total time 
saved by the worker? 
A. 2 hours 
B. 3 hours 
C. 6 hours 
D. 3.5 hours (2 Marks) 
4. From the following information, calculate the Total cost of Product A and B 
using the ABC analysis: 
  Product A Product B 
Units 5,000 5,000 
Number of purchase orders placed 100 220 
Number of deliveries received 70 200 
Ordering Cost ` 4,00,000 
Delivery Cost ` 1,35,000 
A. A = ` 47,500; B = ` 1,27,500 
B. A = ` 2,67,500; B = ` 2,67,500 
C. A = ` 1,60,00; B = ` 3,75,000 
D. A = ` 1,47,500; B = ` 1,47,500  (2 Marks) 
5. What would be Prime cost from below information? 
Direct materials Purchased  :  ` 75,000 
Direct labour    :  ` 45,000 
Direct expenses   :  ` 15,000 
Manufacturing overheads  :  ` 22,500 
Direct materials consumed  : ` 67,500 
A. ` 1,35,000 
B. ` 1,27,500 
C. ` 1,57,500 
D. ` 1,50,000      (2 Marks) 
6. A product passes through Process-I. Input raw material issued were 8,000 
units. Normal loss anticipated was 10% of input with realisable value of ` 5 
per unit.  7,600 units of output were produced and transferred to next process.  
If the total cost incurred under Process-I was ` 40,000, then amount of 
abnormal gain/(loss) is: 
A. ` 2,000 
15
Page 5


 
MODEL TEST PAPER 2 
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. 
1. A meeting of the heads of departments of the Arnav Ltd. has been called to 
review the operating performance of the company in the last financial year. 
The head of the production department appraised that during the last year the 
company could operate at 70% capacity level but in the coming financial year 
95% capacity level can be achieved if an additional amount of `100 Crore on 
capex and working capital is incurred.  
 The head of the finance department has presented that during the last 
financial year the company had a P/V ratio of 40%, margin of safety and the 
break-even were `50 crore and `200 crore respectively.  
 To the reply to the proposal of increasing the production capacity level to 95%, 
the head of the finance department has informed that this could be achieved 
if the selling price and variable cost are reduced by 8% and 5% of sales 
respectively. Fixed cost will also increase by `20 crore due to increased 
depreciation on additional assets. The additional capital will be arranged at a 
cost of 15% p.a. from a bank. 
 In the coming financial year, it has been aimed to achieve an additional profit 
of `10 crore over and above the last year’s profit after adjusting the interest 
cost on the additional capital.  
 The following points is required to be calculated on urgent basis to put the 
same in the meeting. You being an assistant to the head of finance, has been 
asked the followings: 
i.  What will be the revised sales for the coming financial year? 
A.   ` 322.22 Crore  
12
 
B.  ` 311.11 Crore 
C.  ` 300.00 Crore 
D.  ` 324.24 Crore 
ii.  What will be the revised break-even point for the coming financial year? 
A.  ` 222.22 Crore 
B.  ` 252.22 Crore 
C.  ` 244.44 Crore 
D.  ` 255.56 Crore 
iii.  What will be the revised margin of safety for the coming financial year? 
A.  ` 100 Crore 
B.  ` 58.89 Crore 
C.  ` 55.56 Crore 
D.  ` 66.66 Crore 
iv.  The profit of the last year and for the coming year are: 
A.  ` 50 Crore & `95 Crore respectively 
B.  ` 20 Crore & ` 65 Crore respectively 
C.  ` 20 Crore & ` 30 Crore respectively 
D.  ` 45 Crore & ` 66.66 Crore respectively 
v.  The total cost of the last year and for the coming year are: 
A.  ` 230 Crore & `292.22 
B.  ` 230 Crore & `275 Crore 
C.  ` 220 Crore & `282.22 Crore 
D. ` 220 Crore & `292.22 Crore       (5 x 2 = 10 Marks) 
2. K Ltd. is a manufacturer of a single product A. 8,000 units of the product A 
has been produced in the month of March 2024. At the beginning of the year 
a total 1,20,000 units of the product-A has been planned for production. The 
cost department has provided the following estimates of overheads:  
Fixed ` 12,00,000 Variable  ` 6,00,000 
Semi-Variable ` 1,80,000   
 Semi-variable charges are considered to include 60 per cent expenses of 
fixed nature and 40 per cent of variable character. 
 The records of the production department shows that the company could have 
operated for 20 days but there was a festival holiday during the month. 
 
 
13
 
The actual cost data for the month of March 2024 are as follows: 
Fixed ` 1,19,000 Variable  ` 48,000 
Semi-Variable ` 19,200   
 The cost department of the company is now preparing a cost variance report 
for managerial information and action. You being an accounts officer of the 
company are asked to calculate the following information for preparation of 
the variance report:  
i.  What is the amount of variable overhead cost variance for the month of 
March 2024: 
A.  ` 10,200 (A)  
B.  ` 10,400 (A) 
C.  ` 10,800 (A) 
D.  ` 10,880 (A) 
ii.  What is the amount of fixed overhead volume variance for the month of 
March 2024: 
A.  ` 9,000 (F) 
B.  ` 9,000 (A) 
C.  ` 21,800 (A) 
D.  ` 11,000 (A) 
iii.  What is the amount of fixed overhead expenditure variance for the month 
of March 2024: 
A.  ` 21,520 (A) 
B.  ` 21,500 (A) 
C.  ` 21,400 (A) 
D.  ` 21,480 (A) 
iv.  What is the amount of fixed overhead calendar variance for the month of 
March 2024: 
A.  ` 5,400 (A) 
B.  ` 5,450 (A) 
C.  ` 5,480 (A) 
D.  ` 5.420 (A) 
v.  What is the amount of fixed overhead cost variance for the month of 
March 2024: 
A.  ` 43,320 (A) 
B.  ` 43,300 (A) 
C.  ` 43,200 (A) 
14
 
D. ` 43,380 (A)    (5 x 2 = 10 Marks) 
3. If the amount of wages under Halsey plan is ` 420, total time allowed is 8 
hours and the guaranteed time rate is ` 60 per hour. What is the total time 
saved by the worker? 
A. 2 hours 
B. 3 hours 
C. 6 hours 
D. 3.5 hours (2 Marks) 
4. From the following information, calculate the Total cost of Product A and B 
using the ABC analysis: 
  Product A Product B 
Units 5,000 5,000 
Number of purchase orders placed 100 220 
Number of deliveries received 70 200 
Ordering Cost ` 4,00,000 
Delivery Cost ` 1,35,000 
A. A = ` 47,500; B = ` 1,27,500 
B. A = ` 2,67,500; B = ` 2,67,500 
C. A = ` 1,60,00; B = ` 3,75,000 
D. A = ` 1,47,500; B = ` 1,47,500  (2 Marks) 
5. What would be Prime cost from below information? 
Direct materials Purchased  :  ` 75,000 
Direct labour    :  ` 45,000 
Direct expenses   :  ` 15,000 
Manufacturing overheads  :  ` 22,500 
Direct materials consumed  : ` 67,500 
A. ` 1,35,000 
B. ` 1,27,500 
C. ` 1,57,500 
D. ` 1,50,000      (2 Marks) 
6. A product passes through Process-I. Input raw material issued were 8,000 
units. Normal loss anticipated was 10% of input with realisable value of ` 5 
per unit.  7,600 units of output were produced and transferred to next process.  
If the total cost incurred under Process-I was ` 40,000, then amount of 
abnormal gain/(loss) is: 
A. ` 2,000 
15
 
B. (` 5,000) 
C. (` 2,500) 
D. ` 3,000      (2 Marks) 
7. Find out the most appropriate unit cost from the following information of ZMD 
Transport Services Ltd. dealing in goods carriage: 
Total cost      = ` 5,25,000 
Kms. Travelled   = 8,75,000  
Tonnes carries   = 4,000 
No. of Drivers   = 25 
No. of trucks    = 20 
Tonnes Km carried   = 6,55,000 
A. ` 0.6 
B. ` 0.8 
C. ` 21,000  
D. ` 131.25     (2 Marks) 
 
PART-II – Descriptive Questions (70 Marks) 
Question No. 1 is compulsory. 
Attempt any four questions out of the remaining five questions. 
1. (a)  The product of a manufacturing concern passes through two processes 
A and B and then to finished stock. The details of expenses incurred on 
the two processes during the year were as under: 
 Process A (`) Process B (`) 
Materials 40,000 -- 
Labour 40,000 56,000 
Overheads 16,000 40,000 
 On completion, the output of Process A is transferred to Process B at a 
price calculated to give a profit of 20% on the transfer price and the 
output of Process B is charged to finished stock at a profit of 25% on the 
transfer price. The finished stock department realized ` 4,00,000 for the 
finished goods received from Process B. 
 You are asked to SHOW process accounts and total profit, assuming that 
there was no opening or closing work-in-progress. (5 Marks) 
(b) DSM Ltd manufactures speed boats which require propeller TP-M4. The 
following particulars are collected for the year 2023-24: 
(i) Annual demand of TP-M4 12,000 units 
16