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Costing Paper Strategy
SECTION -
B

a) COST SHEET
2
6) MATERIAL LABOUR

3 .
al OVERHEADS
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6) RECONCILIATION STATEMENT

4 .
a) OPERATING COSTING
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6) CONTRACT COSTING PROCESS COSTING

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5 .
9) PROCESS COSTING JOINTG BY PRODUCT
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6 Basic COSTING
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marginal STANDARD COSTING

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8 EMPLOYEE COST

9 OVSRHEADS

MARGINAL GOSTING
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OTHERS
 INTERMEDIATE EXAMINATION SET - 1
MODEL ANSWERS TERM – DECEMBER 2024
PAPER – 8 SYLLABUS 2022
COST ACCOUNTING
Time Allowed: 3 Hours Full Marks: 100

The figures in the margin on the right side indicate full marks.

SECTION – A (Compulsory)

1. Choose the correct option: [15 x 2 = 30]

(i) What is the primary objective of cost accounting?
a. Maximize profits
b. Record financial transactions
c. Provide financial statements
d. Facilitate cost control and decision-making

(ii) If the direct materials consumed are ₹30,000, direct labour is ₹20,000, and factory overhead is
15,000, what is the total manufacturing cost?
a. 50,000
b. 65,000
c. 35,000
d. 20,000

(iii) The sum of direct labour and factory overhead is termed __________.
a. Prime Cost
b. Conversion Cost
c. Cost of goods manufactured
d. Direct Cost

(iv) A company employs three drivers to deliver goods to its customers. The salaries paid to these
drivers are:
a. a part of prime cost
b. a direct production expense
c. a production overhead
d. a selling and distribution overhead

(v) What does CAS-11 emphasize regarding the treatment of abnormal administrative costs?
a. Inclusion in cost calculations
b. Exclusion from cost calculations
c. Separate disclosure in footnotes
d. Attestation by external auditors

(vi) Which of the following is a scientific and accurate method for calculating factory overhead
absorption?
a. Percentage of prime cost method
b. Machine hour rate method
c. Percentage of direct material cost method
d. Percentage of direct labour cost method

(vii) A company calculates the prices of jobs by adding overheads to the prime cost and adding 30%
to total costs as a profit margin. Job number Y256 was sold for ₹1,690 and incurred overheads of
₹694. What was the prime cost of the job?

1
Directorate of Studies, The Institute of Cost Accountants of India
 INTERMEDIATE EXAMINATION SET - 1
MODEL ANSWERS TERM – DECEMBER 2024
PAPER – 8 SYLLABUS 2022
COST ACCOUNTING
a. 489
b. 606
c. 996
d. 1,300

(viii) Which of the following does not form part of prime cost?
a. GST paid on raw materials (input credit can be claimed)
b. Cost of transportation paid to bring materials to factory
c. Cost of packing
d. Overtime premium paid to workers
(ix) Job costing is:
a. Suitable where similar products are produced on a mass scale
b. Method of costing used for non-standard and non-repetitive products
c. Applicable to all industries regardless of the products or services produced
d. None of the above
(x) Normal capacity of a plant refers to the difference between:
a. Maximum capacity and practical capacity
b. Maximum capacity and actual capacity
c. Practical capacity and estimated idle capacity as revealed by long term sales trend
d. Practical capacity and normal capacity
(xi) A flexible budget requires a careful study of:
a. Fixed, semi-fixed and variable expenses
b. Past and current expenses
c. Overheads, selling and administrative expenses.
d. None of these.
(xii) Marginal Costing technique follows the ____________ basis of classification of costs.
a. Element wise
b. Function Wise
c. Behaviour wise
d. Identifiability wise
(xiii) What characterizes a non-integrated cost accounting system?
a. Unified ledger system
b. Separate cost and financial accounts
c. Sole reliance on cost principles
d. Complex reconciliation processes
(xiv) Administration overheads are usually absorbed as a percentage of _____________.
a. Works Cost
b. Prime Cost
c. Cost of goods sold
d. Cost of production
(xv) If the time saved is less than 50% of the standard time, then the wages under Rowan and Halsey
premium plan on comparison gives:
a. Equal wages under two plans
b. More wages to workers under Halsey Plan than Rowan Plan
c. More wages to workers under Rowan Plan than Halsey Plan
d. None of the above

2
Directorate of Studies, The Institute of Cost Accountants of India
*

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sales I 150000

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12000 608

1500

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HHBONUS 684 [12XEIn]

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