Mock Test Paper with Model Answers for June 2022 Online Examination – Inter/P08-CAC/S1
INTERMEDIATE EXAMINATION
Syllabus 2016
Paper 8: COST ACCOUNTING (CAC)
Time Allowed: 3 Hours Full Marks: 100
There are Sections A, B, C and D to be answered subject to instructions given against each.
Section A 20 X 1 =
You are required to answer all the questions. Each question carries 1 mark. 20 Marks
Instructions: Each question is followed by 4 Answer choices and only one is correct. You are required to select
the choice which according to you represents the correct answer.
1. a. VED Analysis Method is applicable when_______ are used.
(i) Spare parts A
(ii) Materials
(iii) Labourers
(iv) All of these
b. Selling and Distribution Overheads are absorbed on the basis of _________________ .
(i) Percentage on Selling Price
(ii) Percentage on Works Costs A
(iii) Rate Per Unit
(iv) None of the above
c. In the absence of any clear information, Joint Factory Overheads will be allocated in the ratio of
__________________ .
(i) Direct Wages A
(ii) Prime Cost
(iii) Work Cost
(iv) None of the above
d. Integral Accounts eliminate the necessity of operating ______________ .
(i) Cost Ledger Control Account A
(ii) Stores Ledger Control Account
(iii) Overhead Adjustment Account
(iv) None of the above
e. Which of the following best describes Fixed Cost?
(i) It may change in total where such change is unrelated to changes in production. A
(ii) It may change in total where such change is related to changes in production.
(iii) It is constant per unit of change in production.
(iv) It may change in total where such change depends on production within the relevant
range.
f. The allocation base used should be most strongly associated with the __________.
(i) Cost of Direct Materials
(ii) Cost of Direct Labour
(iii) Overhead Cost A
(iv) Total Cost
The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament)
,Mock Test Paper with Model Answers for June 2022 Online Examination – Inter/P08-CAC/S1
g. Variable Cost per unit _______________.
(i) Increases when the number of units produced increases.
(ii) Does not change when the number of units produced increases/ decreases A
(iii) Decreases when the number of units produced increases.
(iv) Decreases when the number of units produced decreases.
h. The Cost of Capital is the Weighted Average of :
(i) Fixed and Variable Costs.
(ii) Incremental Cash Inflows and Outflows.
(iii) Debt and Equity financing. A
(iv) Net Present Value and Internal Rate of Return
i. A Job-order Costing System is likely to be used by ______________.
(i) Soft-drink Bottler
(ii) Breakfast Cereal Manufacturer
(iii) Paint Manufacturer
(iv) Custom Home Builder A
j. In a Process Costing System, when raw materials are put into process, the cost of the items is
transferred from ___________________
(i) Work in Process to Finished Goods
(ii) Finished Goods to Cost of Goods Sold
(iii) Raw Materials to Work in Process A
(iv) Finished Goods to Cost of Goods Sold
k. The type of costing system commonly used by companies that produce a large number of
homogeneous units in a continuous production process is called a ______________.
(i) Unit Costing System
(ii) Job-Order System
(iii) Management Cost System
(iv) Process Costing System A
l. Composite Cost Unit for a hospital is:
(i) Per day
(ii) Per bed
(iii) Per patient
(iv) Per patient-day A
m. The ending Work in Process inventory in the mixing department contains 300 units that are 30%
complete with respect to labour costs. How many equivalent units are in the ending inventory?
(i) 300
(ii) 70
(iii) 210
(iv) 90 A
n. Activity based pricing seeks to:
(i) Charge customers with the costs that they are creating. A
(ii) Make greater profits by charging all customers more.
The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament)
, Mock Test Paper with Model Answers for June 2022 Online Examination – Inter/P08-CAC/S1
(iii) Maintain all customers in the customer base
(iv) All of the above
o. If the contribution margin is less than zero:
(i) The selling price is more than the variable cost per unit.
(ii) The fixed costs should be increased.
(iii) The company should sell more units.
(iv) There is no positive break even point. A
p. Which of the following is a resource constraint:
(i) Machine Hour Available A
(ii) Sales Commission
(iii) Cost Per Unit
(iv) Budgeted Overhead
q. For the purpose of Proof, Material Cost Variance is equal to:
(i) Material Usage Variance + Material Mix variance
(ii) Material Price Variance + Material Usage Variance A
(iii) Material Price Variance + Material yield variance
(iv) Material Mix Variance + Material Yield Variance
r. Sales budget is a/an:
(i) Expenditure budget
(ii) Functional budget A
(iii) Master budget
(iv) None of these
s. Marginal Costing technique follows the following basic of classification:
(i) Element wise
(ii) Function Wise
(iii) Behaviour wise A
(iv) Identifiability wise
t. Difference between standard cost and actual cost is called as _______.
(i) Wastage
(ii) Loss
(iii) Variance A
(iv) Profit
Section B 10 X 2 =
You are required to answer all the questions. Each question carries 2 marks. 20 Marks
Instructions: Each question is followed by a space where you are required to type your answer.
2. a. Compute the Inventory turnover ratio from the following:
Opening Stock - Rs.10,000, Closing Stock - Rs.16,000, Material Consumed - Rs.78,000
The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament)
INTERMEDIATE EXAMINATION
Syllabus 2016
Paper 8: COST ACCOUNTING (CAC)
Time Allowed: 3 Hours Full Marks: 100
There are Sections A, B, C and D to be answered subject to instructions given against each.
Section A 20 X 1 =
You are required to answer all the questions. Each question carries 1 mark. 20 Marks
Instructions: Each question is followed by 4 Answer choices and only one is correct. You are required to select
the choice which according to you represents the correct answer.
1. a. VED Analysis Method is applicable when_______ are used.
(i) Spare parts A
(ii) Materials
(iii) Labourers
(iv) All of these
b. Selling and Distribution Overheads are absorbed on the basis of _________________ .
(i) Percentage on Selling Price
(ii) Percentage on Works Costs A
(iii) Rate Per Unit
(iv) None of the above
c. In the absence of any clear information, Joint Factory Overheads will be allocated in the ratio of
__________________ .
(i) Direct Wages A
(ii) Prime Cost
(iii) Work Cost
(iv) None of the above
d. Integral Accounts eliminate the necessity of operating ______________ .
(i) Cost Ledger Control Account A
(ii) Stores Ledger Control Account
(iii) Overhead Adjustment Account
(iv) None of the above
e. Which of the following best describes Fixed Cost?
(i) It may change in total where such change is unrelated to changes in production. A
(ii) It may change in total where such change is related to changes in production.
(iii) It is constant per unit of change in production.
(iv) It may change in total where such change depends on production within the relevant
range.
f. The allocation base used should be most strongly associated with the __________.
(i) Cost of Direct Materials
(ii) Cost of Direct Labour
(iii) Overhead Cost A
(iv) Total Cost
The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament)
,Mock Test Paper with Model Answers for June 2022 Online Examination – Inter/P08-CAC/S1
g. Variable Cost per unit _______________.
(i) Increases when the number of units produced increases.
(ii) Does not change when the number of units produced increases/ decreases A
(iii) Decreases when the number of units produced increases.
(iv) Decreases when the number of units produced decreases.
h. The Cost of Capital is the Weighted Average of :
(i) Fixed and Variable Costs.
(ii) Incremental Cash Inflows and Outflows.
(iii) Debt and Equity financing. A
(iv) Net Present Value and Internal Rate of Return
i. A Job-order Costing System is likely to be used by ______________.
(i) Soft-drink Bottler
(ii) Breakfast Cereal Manufacturer
(iii) Paint Manufacturer
(iv) Custom Home Builder A
j. In a Process Costing System, when raw materials are put into process, the cost of the items is
transferred from ___________________
(i) Work in Process to Finished Goods
(ii) Finished Goods to Cost of Goods Sold
(iii) Raw Materials to Work in Process A
(iv) Finished Goods to Cost of Goods Sold
k. The type of costing system commonly used by companies that produce a large number of
homogeneous units in a continuous production process is called a ______________.
(i) Unit Costing System
(ii) Job-Order System
(iii) Management Cost System
(iv) Process Costing System A
l. Composite Cost Unit for a hospital is:
(i) Per day
(ii) Per bed
(iii) Per patient
(iv) Per patient-day A
m. The ending Work in Process inventory in the mixing department contains 300 units that are 30%
complete with respect to labour costs. How many equivalent units are in the ending inventory?
(i) 300
(ii) 70
(iii) 210
(iv) 90 A
n. Activity based pricing seeks to:
(i) Charge customers with the costs that they are creating. A
(ii) Make greater profits by charging all customers more.
The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament)
, Mock Test Paper with Model Answers for June 2022 Online Examination – Inter/P08-CAC/S1
(iii) Maintain all customers in the customer base
(iv) All of the above
o. If the contribution margin is less than zero:
(i) The selling price is more than the variable cost per unit.
(ii) The fixed costs should be increased.
(iii) The company should sell more units.
(iv) There is no positive break even point. A
p. Which of the following is a resource constraint:
(i) Machine Hour Available A
(ii) Sales Commission
(iii) Cost Per Unit
(iv) Budgeted Overhead
q. For the purpose of Proof, Material Cost Variance is equal to:
(i) Material Usage Variance + Material Mix variance
(ii) Material Price Variance + Material Usage Variance A
(iii) Material Price Variance + Material yield variance
(iv) Material Mix Variance + Material Yield Variance
r. Sales budget is a/an:
(i) Expenditure budget
(ii) Functional budget A
(iii) Master budget
(iv) None of these
s. Marginal Costing technique follows the following basic of classification:
(i) Element wise
(ii) Function Wise
(iii) Behaviour wise A
(iv) Identifiability wise
t. Difference between standard cost and actual cost is called as _______.
(i) Wastage
(ii) Loss
(iii) Variance A
(iv) Profit
Section B 10 X 2 =
You are required to answer all the questions. Each question carries 2 marks. 20 Marks
Instructions: Each question is followed by a space where you are required to type your answer.
2. a. Compute the Inventory turnover ratio from the following:
Opening Stock - Rs.10,000, Closing Stock - Rs.16,000, Material Consumed - Rs.78,000
The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament)
