Cost and Management Accounting Model Test Paper - 3 (Questions) - CA Intermediate PDF Download

 Page 1


MODEL TEST PAPER 3 
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.  The board of the J Ltd. has been appraised by the General Manager (HR) that 
the employee attrition rate in the company has increased. The following facts 
has been presented by the GM(HR): 
(1) Training period of the new recruits is 50,000 hours. During this period 
their productivity is 60% of the experienced workers.  Time required by 
an experienced worker is 10 hours per unit. 
(2) 20% of the output during training period was defective. Cost of 
rectification of a defective unit was ` 25. 
(3) Potential productive hours lost due to delay in recruitment were 1,00,000 
hours. 
(4) Selling price per unit is ` 180 and P/V ratio is 20%. 
(5) Settlement cost of the workers leaving the organization was ` 1,83,480. 
(6) Recruitment cost was ` 1,56,340 
(7) Training cost was ` 1,13,180 
 You being an associate finance to GM(HR), has been asked the following 
questions: 
(i)  How much quantity of output is lost due to labour turnover? 
(a)  10,000 units 
(b)  8,000 units 
(c)  12,000 units 
(d)  12,600 units 
22
Page 2


MODEL TEST PAPER 3 
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.  The board of the J Ltd. has been appraised by the General Manager (HR) that 
the employee attrition rate in the company has increased. The following facts 
has been presented by the GM(HR): 
(1) Training period of the new recruits is 50,000 hours. During this period 
their productivity is 60% of the experienced workers.  Time required by 
an experienced worker is 10 hours per unit. 
(2) 20% of the output during training period was defective. Cost of 
rectification of a defective unit was ` 25. 
(3) Potential productive hours lost due to delay in recruitment were 1,00,000 
hours. 
(4) Selling price per unit is ` 180 and P/V ratio is 20%. 
(5) Settlement cost of the workers leaving the organization was ` 1,83,480. 
(6) Recruitment cost was ` 1,56,340 
(7) Training cost was ` 1,13,180 
 You being an associate finance to GM(HR), has been asked the following 
questions: 
(i)  How much quantity of output is lost due to labour turnover? 
(a)  10,000 units 
(b)  8,000 units 
(c)  12,000 units 
(d)  12,600 units 
22
(ii)  How much loss in the form of contribution, the company incurred due to 
labour turnover? 
(a)  ` 4,32,000 
(b)  ` 4,20,000 
(c)  ` 4,36,000 
(d)  ` 4,28,000 
(iii)  What is the cost repairing of defective units? 
(a)  ` 75,000 
(b)  ` 15,000 
(c)  ` 50,000 
(d)  ` 25,000 
(iv)  Calculate the profit lost by the company due to increased labour 
turnover. 
(a)  ` 7,50,000 
(b)  ` 15,00,000 
(c)  ` 5,00,000 
(d)  ` 9,00,000 
(v)  How much quantity of output is lost due to inexperience of the new 
worker? 
(a)  1,000 units 
(b)  2,600 units 
(c)  2,000 units 
(d)  12,600 units (5 x 2 = 10 Marks) 
2.  P Ltd. has gathered cost information from ledgers and other sources for the 
year ended 31
st
 December 2023. The information are tabulated below:   
Sl. 
No. 
 Amount 
(`) 
Amount (`) 
(i) Raw materials purchased  5,00,00,000 
(ii) Freight inward  9,20,600 
(iii) Wages paid to factory workers  25,20,000 
(iv) Royalty paid for production  1,80,000 
(v) Amount paid for power & fuel  3,50,000 
(vi) Job charges paid to job workers  3,10,000 
(vii) Stores and spares consumed  1,10,000 
(viii) Depreciation on office building  50,000 
(ix) Repairs & Maintenance paid for: 
- Plant & Machinery 
 
40,000 
 
23
Page 3


MODEL TEST PAPER 3 
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.  The board of the J Ltd. has been appraised by the General Manager (HR) that 
the employee attrition rate in the company has increased. The following facts 
has been presented by the GM(HR): 
(1) Training period of the new recruits is 50,000 hours. During this period 
their productivity is 60% of the experienced workers.  Time required by 
an experienced worker is 10 hours per unit. 
(2) 20% of the output during training period was defective. Cost of 
rectification of a defective unit was ` 25. 
(3) Potential productive hours lost due to delay in recruitment were 1,00,000 
hours. 
(4) Selling price per unit is ` 180 and P/V ratio is 20%. 
(5) Settlement cost of the workers leaving the organization was ` 1,83,480. 
(6) Recruitment cost was ` 1,56,340 
(7) Training cost was ` 1,13,180 
 You being an associate finance to GM(HR), has been asked the following 
questions: 
(i)  How much quantity of output is lost due to labour turnover? 
(a)  10,000 units 
(b)  8,000 units 
(c)  12,000 units 
(d)  12,600 units 
22
(ii)  How much loss in the form of contribution, the company incurred due to 
labour turnover? 
(a)  ` 4,32,000 
(b)  ` 4,20,000 
(c)  ` 4,36,000 
(d)  ` 4,28,000 
(iii)  What is the cost repairing of defective units? 
(a)  ` 75,000 
(b)  ` 15,000 
(c)  ` 50,000 
(d)  ` 25,000 
(iv)  Calculate the profit lost by the company due to increased labour 
turnover. 
(a)  ` 7,50,000 
(b)  ` 15,00,000 
(c)  ` 5,00,000 
(d)  ` 9,00,000 
(v)  How much quantity of output is lost due to inexperience of the new 
worker? 
(a)  1,000 units 
(b)  2,600 units 
(c)  2,000 units 
(d)  12,600 units (5 x 2 = 10 Marks) 
2.  P Ltd. has gathered cost information from ledgers and other sources for the 
year ended 31
st
 December 2023. The information are tabulated below:   
Sl. 
No. 
 Amount 
(`) 
Amount (`) 
(i) Raw materials purchased  5,00,00,000 
(ii) Freight inward  9,20,600 
(iii) Wages paid to factory workers  25,20,000 
(iv) Royalty paid for production  1,80,000 
(v) Amount paid for power & fuel  3,50,000 
(vi) Job charges paid to job workers  3,10,000 
(vii) Stores and spares consumed  1,10,000 
(viii) Depreciation on office building  50,000 
(ix) Repairs & Maintenance paid for: 
- Plant & Machinery 
 
40,000 
 
23
 - Sales office building 20,000 60,000 
(x) Insurance premium paid for:   
 - Plant & Machinery 28,200  
 - Factory building 18,800 47,000 
(xi) Expenses paid for quality control 
check activities 
 18,000 
(xii) Research & development cost paid for 
improvement in production process 
 20,000 
(xiii) Expenses paid for pollution control and 
engineering & maintenance 
 36,000 
(xiv) Salary paid to Sales & Marketing 
mangers 
 5,60,000 
(xv) Salary paid to General Manager  6,40,000 
(xvi) Packing cost paid for:   
 - Primary packing necessary to 
maintain quality 
46,000  
 - For re-distribution of finished 
goods 
80,000 1,26,000 
(xvii) Fee paid to independent directors  1,20,000 
(xviii) Performance bonus paid to sales 
staffs 
 1,20,000 
(xix) Value of stock as on 1
st
January, 2023:   
 - Raw materials 10,00,000  
 - Work-in-process 8,60,000  
 - Finished goods 12,00,000 30,60,000 
(xx) Value of stock as on 31
st
December, 
2023: 
  
 - Raw materials 8,40,000  
 - Work-in-process 6,60,000  
 - Finished goods 10,50,000 25,50,000 
 Amount realized by selling of scrap and waste generated during 
manufacturing process – ` 48,000/- 
 The board meeting is scheduled to be held in next week and you being an 
associate to the chief cost controller of the company, has been asked to be 
prepared with the following figures: 
(i)  How much is the prime cost of the company? 
(a)  ` 5,10,80,600 
(b)  ` 5,44,40,600 
(c)  ` 5,36,00,600 
(d)  ` 5,19,20,600 
24
Page 4


MODEL TEST PAPER 3 
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.  The board of the J Ltd. has been appraised by the General Manager (HR) that 
the employee attrition rate in the company has increased. The following facts 
has been presented by the GM(HR): 
(1) Training period of the new recruits is 50,000 hours. During this period 
their productivity is 60% of the experienced workers.  Time required by 
an experienced worker is 10 hours per unit. 
(2) 20% of the output during training period was defective. Cost of 
rectification of a defective unit was ` 25. 
(3) Potential productive hours lost due to delay in recruitment were 1,00,000 
hours. 
(4) Selling price per unit is ` 180 and P/V ratio is 20%. 
(5) Settlement cost of the workers leaving the organization was ` 1,83,480. 
(6) Recruitment cost was ` 1,56,340 
(7) Training cost was ` 1,13,180 
 You being an associate finance to GM(HR), has been asked the following 
questions: 
(i)  How much quantity of output is lost due to labour turnover? 
(a)  10,000 units 
(b)  8,000 units 
(c)  12,000 units 
(d)  12,600 units 
22
(ii)  How much loss in the form of contribution, the company incurred due to 
labour turnover? 
(a)  ` 4,32,000 
(b)  ` 4,20,000 
(c)  ` 4,36,000 
(d)  ` 4,28,000 
(iii)  What is the cost repairing of defective units? 
(a)  ` 75,000 
(b)  ` 15,000 
(c)  ` 50,000 
(d)  ` 25,000 
(iv)  Calculate the profit lost by the company due to increased labour 
turnover. 
(a)  ` 7,50,000 
(b)  ` 15,00,000 
(c)  ` 5,00,000 
(d)  ` 9,00,000 
(v)  How much quantity of output is lost due to inexperience of the new 
worker? 
(a)  1,000 units 
(b)  2,600 units 
(c)  2,000 units 
(d)  12,600 units (5 x 2 = 10 Marks) 
2.  P Ltd. has gathered cost information from ledgers and other sources for the 
year ended 31
st
 December 2023. The information are tabulated below:   
Sl. 
No. 
 Amount 
(`) 
Amount (`) 
(i) Raw materials purchased  5,00,00,000 
(ii) Freight inward  9,20,600 
(iii) Wages paid to factory workers  25,20,000 
(iv) Royalty paid for production  1,80,000 
(v) Amount paid for power & fuel  3,50,000 
(vi) Job charges paid to job workers  3,10,000 
(vii) Stores and spares consumed  1,10,000 
(viii) Depreciation on office building  50,000 
(ix) Repairs & Maintenance paid for: 
- Plant & Machinery 
 
40,000 
 
23
 - Sales office building 20,000 60,000 
(x) Insurance premium paid for:   
 - Plant & Machinery 28,200  
 - Factory building 18,800 47,000 
(xi) Expenses paid for quality control 
check activities 
 18,000 
(xii) Research & development cost paid for 
improvement in production process 
 20,000 
(xiii) Expenses paid for pollution control and 
engineering & maintenance 
 36,000 
(xiv) Salary paid to Sales & Marketing 
mangers 
 5,60,000 
(xv) Salary paid to General Manager  6,40,000 
(xvi) Packing cost paid for:   
 - Primary packing necessary to 
maintain quality 
46,000  
 - For re-distribution of finished 
goods 
80,000 1,26,000 
(xvii) Fee paid to independent directors  1,20,000 
(xviii) Performance bonus paid to sales 
staffs 
 1,20,000 
(xix) Value of stock as on 1
st
January, 2023:   
 - Raw materials 10,00,000  
 - Work-in-process 8,60,000  
 - Finished goods 12,00,000 30,60,000 
(xx) Value of stock as on 31
st
December, 
2023: 
  
 - Raw materials 8,40,000  
 - Work-in-process 6,60,000  
 - Finished goods 10,50,000 25,50,000 
 Amount realized by selling of scrap and waste generated during 
manufacturing process – ` 48,000/- 
 The board meeting is scheduled to be held in next week and you being an 
associate to the chief cost controller of the company, has been asked to be 
prepared with the following figures: 
(i)  How much is the prime cost of the company? 
(a)  ` 5,10,80,600 
(b)  ` 5,44,40,600 
(c)  ` 5,36,00,600 
(d)  ` 5,19,20,600 
24
(ii)  How much is the cost of production? 
(a)  ` 5,49,09,600 
(b)  ` 5,50,59,600 
(c)  ` 5,48,73,600 
(d)  ` 5,50,59,000 
(iii)  What is the value of cost of goods sold? 
(a)  ` 5,49,09,600 
(b)  ` 5,50,59,600 
(c)  ` 5,48,73,600 
(d)  ` 5,50,59,000 
(iv)  How much is the factory cost? 
(a)  ` 5,49,09,600 
(b)  ` 5,50,59,600 
(c)  ` 5,48,73,600 
(d)  ` 5,50,59,000 
(v)  What is the value of cost of sales? 
(a)  ` 5,66,49,600 
(b)  ` 5,50,59,600 
(c)  ` 5,48,73,600 
(d)  ` 5,50,59,000 (5 x 2 = 10 Marks) 
3.  What is ‘Variable Overhead Efficiency Variance’ based on information given 
below: 
Budgeted production 12,000 units 
Budgeted variable overhead ` 2,40,000 
Standard time for one unit of output 2 hours 
Actual production 11,800 units 
Actual overhead incurred ` 2,44,000 
Actual hours worked 23,200 hours 
(a) ` 4000 (A) 
(b) ` 6000 (A) 
(c) ` 2000 (F) 
(d)  ` 4000 (F) (2 Marks) 
4.  A company sells two products, A and B. The sales mix is 4 units of A and 3 
units of B. The contribution margins per unit are ` 140 for A and ` 70 for B. 
Fixed costs are ` 6,16,000 per month. What is Break Even Point for Product 
B? 
25
Page 5


MODEL TEST PAPER 3 
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.  The board of the J Ltd. has been appraised by the General Manager (HR) that 
the employee attrition rate in the company has increased. The following facts 
has been presented by the GM(HR): 
(1) Training period of the new recruits is 50,000 hours. During this period 
their productivity is 60% of the experienced workers.  Time required by 
an experienced worker is 10 hours per unit. 
(2) 20% of the output during training period was defective. Cost of 
rectification of a defective unit was ` 25. 
(3) Potential productive hours lost due to delay in recruitment were 1,00,000 
hours. 
(4) Selling price per unit is ` 180 and P/V ratio is 20%. 
(5) Settlement cost of the workers leaving the organization was ` 1,83,480. 
(6) Recruitment cost was ` 1,56,340 
(7) Training cost was ` 1,13,180 
 You being an associate finance to GM(HR), has been asked the following 
questions: 
(i)  How much quantity of output is lost due to labour turnover? 
(a)  10,000 units 
(b)  8,000 units 
(c)  12,000 units 
(d)  12,600 units 
22
(ii)  How much loss in the form of contribution, the company incurred due to 
labour turnover? 
(a)  ` 4,32,000 
(b)  ` 4,20,000 
(c)  ` 4,36,000 
(d)  ` 4,28,000 
(iii)  What is the cost repairing of defective units? 
(a)  ` 75,000 
(b)  ` 15,000 
(c)  ` 50,000 
(d)  ` 25,000 
(iv)  Calculate the profit lost by the company due to increased labour 
turnover. 
(a)  ` 7,50,000 
(b)  ` 15,00,000 
(c)  ` 5,00,000 
(d)  ` 9,00,000 
(v)  How much quantity of output is lost due to inexperience of the new 
worker? 
(a)  1,000 units 
(b)  2,600 units 
(c)  2,000 units 
(d)  12,600 units (5 x 2 = 10 Marks) 
2.  P Ltd. has gathered cost information from ledgers and other sources for the 
year ended 31
st
 December 2023. The information are tabulated below:   
Sl. 
No. 
 Amount 
(`) 
Amount (`) 
(i) Raw materials purchased  5,00,00,000 
(ii) Freight inward  9,20,600 
(iii) Wages paid to factory workers  25,20,000 
(iv) Royalty paid for production  1,80,000 
(v) Amount paid for power & fuel  3,50,000 
(vi) Job charges paid to job workers  3,10,000 
(vii) Stores and spares consumed  1,10,000 
(viii) Depreciation on office building  50,000 
(ix) Repairs & Maintenance paid for: 
- Plant & Machinery 
 
40,000 
 
23
 - Sales office building 20,000 60,000 
(x) Insurance premium paid for:   
 - Plant & Machinery 28,200  
 - Factory building 18,800 47,000 
(xi) Expenses paid for quality control 
check activities 
 18,000 
(xii) Research & development cost paid for 
improvement in production process 
 20,000 
(xiii) Expenses paid for pollution control and 
engineering & maintenance 
 36,000 
(xiv) Salary paid to Sales & Marketing 
mangers 
 5,60,000 
(xv) Salary paid to General Manager  6,40,000 
(xvi) Packing cost paid for:   
 - Primary packing necessary to 
maintain quality 
46,000  
 - For re-distribution of finished 
goods 
80,000 1,26,000 
(xvii) Fee paid to independent directors  1,20,000 
(xviii) Performance bonus paid to sales 
staffs 
 1,20,000 
(xix) Value of stock as on 1
st
January, 2023:   
 - Raw materials 10,00,000  
 - Work-in-process 8,60,000  
 - Finished goods 12,00,000 30,60,000 
(xx) Value of stock as on 31
st
December, 
2023: 
  
 - Raw materials 8,40,000  
 - Work-in-process 6,60,000  
 - Finished goods 10,50,000 25,50,000 
 Amount realized by selling of scrap and waste generated during 
manufacturing process – ` 48,000/- 
 The board meeting is scheduled to be held in next week and you being an 
associate to the chief cost controller of the company, has been asked to be 
prepared with the following figures: 
(i)  How much is the prime cost of the company? 
(a)  ` 5,10,80,600 
(b)  ` 5,44,40,600 
(c)  ` 5,36,00,600 
(d)  ` 5,19,20,600 
24
(ii)  How much is the cost of production? 
(a)  ` 5,49,09,600 
(b)  ` 5,50,59,600 
(c)  ` 5,48,73,600 
(d)  ` 5,50,59,000 
(iii)  What is the value of cost of goods sold? 
(a)  ` 5,49,09,600 
(b)  ` 5,50,59,600 
(c)  ` 5,48,73,600 
(d)  ` 5,50,59,000 
(iv)  How much is the factory cost? 
(a)  ` 5,49,09,600 
(b)  ` 5,50,59,600 
(c)  ` 5,48,73,600 
(d)  ` 5,50,59,000 
(v)  What is the value of cost of sales? 
(a)  ` 5,66,49,600 
(b)  ` 5,50,59,600 
(c)  ` 5,48,73,600 
(d)  ` 5,50,59,000 (5 x 2 = 10 Marks) 
3.  What is ‘Variable Overhead Efficiency Variance’ based on information given 
below: 
Budgeted production 12,000 units 
Budgeted variable overhead ` 2,40,000 
Standard time for one unit of output 2 hours 
Actual production 11,800 units 
Actual overhead incurred ` 2,44,000 
Actual hours worked 23,200 hours 
(a) ` 4000 (A) 
(b) ` 6000 (A) 
(c) ` 2000 (F) 
(d)  ` 4000 (F) (2 Marks) 
4.  A company sells two products, A and B. The sales mix is 4 units of A and 3 
units of B. The contribution margins per unit are ` 140 for A and ` 70 for B. 
Fixed costs are ` 6,16,000 per month. What is Break Even Point for Product 
B? 
25
(a) 5,600 units 
(b) 2,400 units 
(c) 3,200 units 
(d) 800 units (2 Marks) 
5.  Total passenger km run by APL logistic Ltd. was ` 43,80,480 for the year 
between Delhi and Manesar. The bus made 3 round trips per day. Seating 
capacity of the bus was 52 passengers and average daily occupancy was 75% 
and the bus runs on an average 26 days in a month. Calculate the distance 
between Delhi and Manesar.  
(a) 55 km  
(b) 720 km  
(c) 65 km  
(d) 60 km (2 Marks) 
6.  Purchase price    ` 10,00,000 
Custom duty     ` 2,00,000 
GST       @12% on Purchase price 
(input credit available) 
Octroi      ` 5,000 
Carriage inward    ` 12,000 
Demurrage charges    ` 16,100 
Commission on purchase   ` 10,000 
Stock of Raw Material:  
Opening     ` 1,00,000 
Closing      ` 2,00,000 
Raw material consumed will be: 
(a) ` 11,27,000 
(b) ` 11,43,100 
(c) ` 12,63,100 
(d) ` 12,58,100 (2 Marks) 
7.  In case of joint products, the main objective of accounting of the cost is to 
apportion the joint costs incurred up to the split off point. For cost 
apportionment one company has chosen Physical Quantity Method. Three 
joint products ‘A’, ‘B’ and ‘C’ are produced in the same process. Up to the 
point of split off the total production of A, B and C is 60,000 kg, out of which 
‘A’ produces 30,000 kg and joint costs are ` 3,60,000. Joint costs allocated to 
product A is - 
(a) ` 1,20,000 
(b) ` 60,000 
26