CMA Inter Suggested Answers | Dec 25 Paper 8 Cost Accounting (CA)
Table of contents
CMA Inter Dec 25 Suggested Answer Other Subjects Blogs :
(i) Basic objective of Cost Accounting is ______.
(ii) The reorder level is ______ units for the following information:
Maximum usage 300 units; Minimum usage 200 units; Reorder period 8 to 10 days.
(iii) Selling price of a product is ₹ 500. A profit margin of 25% on cost is expected. Find out the cost price of the product.
(iv) Which CAS deals with the classification, measurement and assignment of selling and distribution overheads?
(v) CAS 12 deals with
(vi) Audit fees paid to cost auditors is part of ______.
(vii) In Reconciliation Statement, transfers to reserves are ______.
(viii) When the concern is rendering service, then the method of costing to be applied is ______ costing.
(ix) Where 70% of the contract price is certified, the profit to be credited to P&L account will be equal to ______.
(x) In process ‘B’, 75 units of a commodity were transferred from process ‘A’ at a cost of ₹ 1,310. The additional expenses incurred by the process were ₹ 190. 20% of the units entered are normally lost and sold at ₹ 4 per unit. The output of the process was 70 units.
What is the value of output transferred to next process?
(xi) When margin of safety is 20% and P.V. ratio is 60%, the profit will be ______.
(xii) An increase in selling price ______.
(xiii) ______ variance is the difference between the standard cost of materials specified and the actual cost of materials used.
(xiv) The difference between fixed and variable cost has very importance in the preparation of ______.
(xv) ______ is a factor whose influence affects all other budgets.
The cost structure of an article, the selling price of which is ₹ 1,20,000, is as follows:
|
Direct materials |
50% |
|
Direct labour |
20% |
|
Overhead |
30% |
An increase of 15% in the cost of materials and of 25% in the cost of labour is anticipated.
These increased cost in relation to the present selling price would cause a 25% decrease in the amount of present profit per article.
You are required:
(i) To prepare a statement of profit per article at present and of
(ii) The revised selling price to produce the same percentage of profit to sales as before.
X Ltd. is reviewing its stock policy, and has the following alternatives available for the evaluation of stock:
(i) Purchase stock twice in a month, 400 units.
(ii) Purchase monthly, 800 units.
(iii) Purchase every three months, 2,400 units.
(iv) Purchase six monthly, 4,800 units.
(v) Purchase annually, 9,600 units.
It is ascertained that the purchase price per unit is ₹ 40 for deliveries up to 2,000 units. A 5% discount is offered by the supplier on the whole order where deliveries are 2,001 to 4,000 units and 10% reduction on the total order for deliveries in excess of 4,000 units. Each purchase order incurs administrative costs of ₹ 250. Interest on capital and other storage costs are ₹ 12.50 per unit of average stock quantity held.Calculate the optimum order size.
From the details furnished below, you are required to calculate a comprehensive machine-hour rate:
|
Original purchase price of the machine (subject to depreciation at 10% per annum on original cost) |
₹ 3,24,000 |
|
Normal working hours for the month |
200 hours |
|
The machine works to only 75% of capacity |
|
|
Wages of Machine man |
₹ 125 per day (of 8 hours) |
|
Wages for a Helper (Machine attendant) |
₹ 75 per day (of 8 hours) |
|
Power cost for the month for the time worked |
₹ 15,000 |
|
Supervision charges apportioned for the machine centre for the month |
₹ 3,000 |
|
Electricity & Lighting for the month |
₹ 7,500 |
|
Repairs & Maintenance (machine) including consumable stores per month |
₹ 17,500 |
|
Insurance of Plant & Building (apportioned) for the year |
₹ 16,250 |
|
Other general expenses per annum |
₹ 27,500 |
The workers are paid a fixed dearness allowance of ₹ 1,575 per month.Production bonus payable to workers in terms of an award is equal to 33.33% of basic wages and dearness allowance.Add 10% of the basic wage and dearness allowance against leave wages and holidays with pay to arrive at comprehensive labour-wage for debit to production.
Two articles, A and B are produced in a production firm. From the details given below, prepare a statement regarding cost sheet and the financial position of the production firm:
|
|
A |
B |
|
To produce 1 unit : direct material |
₹ 12.50 |
₹ 7.50 |
|
To produce 1 unit : direct wages |
₹ 10.00 |
₹ 6.00 |
Production overhead charges towards wages 100%.
Office overhead charges, towards production centre’s expenses 25% on works cost.
200 units of A and 500 units of B were produced and sold at the rates ₹ 50 and ₹ 30 respectively.
Production overhead expenses involved was ₹ 4,800 and office overhead expenses was ₹ 4,200.
A transport company supplies the following details in respect of a truck of 6 ton capacity:
|
Cost of truck |
₹ 1,20,000 |
|
Estimated life |
10 years |
|
Diesel, oil, grease |
₹ 20 per trip each way |
|
Repairs and maintenance |
₹ 600 per month |
|
Driver’s wage |
₹ 900 per month |
|
Cleaner’s wage |
₹ 300 per month |
|
Insurance |
₹ 6,000 per annum |
|
Tax |
₹ 3,000 per annum |
|
General supervision charges |
₹ 6,000 per annum |
The truck carries goods to and fro the city covering a distance of 60 kilometres each way.On onward trip freight is available to the extent of full capacity and on return 25% of capacity.The truck makes only one trip a day.
Calculate the freight per ton per trip of the truck.
Mr. Vasanth commenced the contract on 1st April, 2024. The following was the expenditure on the contract for ₹ 3,00,000:
|
Materials issued |
₹ 51,000 |
|
Plant used |
₹ 15,000 |
|
Wages |
₹ 81,000 |
|
Other expenses incurred |
₹ 5,000 |
Cash received on account of contract up to 31st March, 2025 amounted ₹ 1,28,000, being 80% of the work certified.Of the plant and materials charged to the contract, plant which costed ₹ 3,000 and materials worth ₹ 2,500 were lost.On 31st March, 2025, the cost of the work done but not certified ₹ 1,000.
Materials in hand were ₹ 2,300.
Charge 15% depreciation on plant.
Calculate the profit of the contract up to 31st March, 2025.
A product passes through three processes, A, B and C. 10,000 units at a cost of ₹ 1 were issued to Process A. The other direct expenses were:
|
|
Process A |
Process B |
Process C |
|
Sundry Materials |
₹ 1,000 |
₹ 1,500 |
₹ 1,480 |
|
Direct Labour |
₹ 5,000 |
₹ 8,000 |
₹ 6,500 |
|
Direct Expenses |
₹ 1,050 |
₹ 1,188 |
₹ 1,605 |
The wastage of Process A was 5% and Process B 4%.The wastage of Process A was sold at ₹ 0.25 per unit, B was sold at ₹ 0.50 per unit and that of C at ₹ 1.00 per unit.The overhead charges were 168% of direct labour.The final product was sold at ₹ 10.00 per unit, fetching a profit of 20% on sales.
Prepare the three process accounts and calculate the percentage of wastage in Process C.
The standard labour employment and the actual labour engaged in a 40 hours week for a job are as under:
|
Category of workers |
Standard No. of |
Standard Wage Rate (₹) |
Actual No. of |
Actual Wage Rate (₹) |
|
Skilled |
65 |
45 |
50 |
50 |
|
Semi skilled |
20 |
30 |
30 |
35 |
|
Unskilled |
115 |
15 |
20 |
10 |
Standard output: 2,000 units; Actual output: 1,800 units; Abnormal idle time: 2 hours in the week.
Required to calculate:
(i) Labour cost variance.
(ii) Labour Efficiency variance.
(iii) Labour idle time variance.
India Ltd. engaged in production activities. An analysis of their accounting reveals:
|
Variable cost per unit |
₹ 20 |
|
Fixed cost |
₹ 50,000 for the year |
|
Capacity |
2,000 units per year |
|
Selling price per unit |
₹ 70 |
Required:
(i) Find the break even point.
(ii) Find the number of units to be sold to get a profit of ₹ 30,000.
(iii) If the company can manufacture 600 units more per year with an additional fixed cost of ₹ 2,000, what should be the selling price to maintain the profit per unit as at above.
ABC Ltd. is engaged in three distinct lines of production. Their production cost per unit and selling prices are as under:
|
|
A |
B |
C |
|
Production (Units) |
3,000 |
2,000 |
5,000 |
|
|
₹ |
₹ |
₹ |
|
Material cost |
18 |
26 |
30 |
|
Wages |
7 |
9 |
10 |
|
Variable overheads |
2 |
3 |
3 |
|
Fixed overheads |
5 |
8 |
9 |
|
Total cost |
32 |
46 |
52 |
|
Selling price |
40 |
60 |
61 |
|
8 |
14 |
9 |
The management wants to discontinue one line and gives you the assurance that production in two other lines shall rise by 50%. They intend to discontinue the line which produces product A as it is less profitable. As a cost accountant of the company, draw your inference about the discontinuance of Product A.
From the following data, calculate the cash position at the end of April, May and June 2024:
|
Month 2024 |
Sales (₹) |
Purchase (₹) |
Wages (₹) |
Sales expenses (₹) |
|
February |
1,20,000 |
80,000 |
10,000 |
7,000 |
|
March |
1,30,000 |
98,000 |
12,000 |
9,000 |
|
April |
70,000 |
1,00,000 |
8,000 |
5,000 |
|
May |
1,16,000 |
1,03,000 |
10,000 |
10,000 |
|
June |
85,000 |
80,000 |
8,000 |
8,000 |
Further information:
Sales: 10% realised in the month of sales, balance equally realised in two subsequent months.
Purchases: Creditors are paid in the month following the month of supply.
Wages: 20% paid in arrears in the following month.
Sales expenses paid in the month itself.
Income Tax ₹ 20,000 payable in June.
Dividend ₹ 12,000 payable in June.
Income from investment ₹ 2,000 received half-yearly in March and September.
Cash balance on hand as on 1.4.2024 ₹ 40,000.
Describe the scope of CAS 5.
Discuss the factors which influence installation of costing system.
Give the meaning of Idle Time. Examine the reasons for Idle Time.
Examine the different methods of costing
Ruchika Saboo
An All India Ranker (AIR 7 - CA Finals, AIR 43 - CA Inter), she is one of those teachers who just loved studying as a student. Aims to bring the same drive in her students.
Ruchika Ma'am has been a meritorious student throughout her student life. She is one of those who did not study from exam point of view or out of fear but because of the fact that she JUST LOVED STUDYING. When she says - love what you study, it has a deeper meaning.
She believes - "When you study, you get wise, you obtain knowledge. A knowledge that helps you in real life, in solving problems, finding opportunities. Implement what you study". She has a huge affinity for the Law Subject in particular and always encourages student to - "STUDY FROM THE BARE ACT, MAKE YOUR OWN INTERPRETATIONS". A rare practice that you will find in her video lectures as well.
She specializes in theory subjects - Law and Auditing.
Yashvardhan Saboo
A Story teller, passionate for simplifying complexities, techie. Perfectionist by heart, he is the founder of - Konceptca.
Yash Sir (As students call him fondly) is not a teacher per se. He is a story teller who specializes in simplifying things, connecting the dots and building a story behind everything he teaches. A firm believer of Real Teaching, according to him - "Real Teaching is not teaching standard methods but giving the power to students to develop his own methods".
He cleared his CA Finals in May 2011 and has been into teaching since. He started teaching CA, CS, 11th, 12th, B.Com, M.Com students in an offline mode until 2016 when Konceptca was launched. One of the pioneers in Online Education, he believes in providing a learning experience which is NEAT, SMOOTH and AFFORDABLE.
He specializes in practical subjects – Accounting, Costing, Taxation, Financial Management. With over 12 years of teaching experience (Online as well as Offline), he SURELY KNOWS IT ALL.
"Koncept perfectly justifies what it sounds, i.e, your concepts are meant to be cleared if you are a Konceptian. My experience with Koncept was amazing. The most striking experience that I went through was the the way Yash sir and Ruchika ma'am taught us in the lectures, making it very interesting and lucid. Another great feature of Koncept is that you get mentor calls which I think drives you to stay motivated and be disciplined. And of course it goes without saying that Yash sir has always been like a friend to me, giving me genuine guidance whenever I was in need. So once again I want to thank Koncept Education for all their efforts."
"Hello everyone, I am Kaushik Prajapati. I recently passed my CA Foundation Dec 23 exam in first attempt, That's possible only of proper guidance given by Yash sir and Ruchika ma'am. Koncept App provide me a video lectures, Notes and best thing about it is question bank. It contains PYP, RTP, MTP with soloution that help me easily score better marks in my exam. I really appericiate to Koncept team and I thankful to Koncept team."
"Hi. My name is Arka Das. I have cleared my CMA Foundation Exam. I cleared my 12th Board Exam from Bengali Medium and I had a very big language problem. Koncept Education has helped me a lot to overcome my language barrier. Their live sessions are really helpful. They have cleared my basic concepts. I think its a phenomenal app."
"I cleared my foundation examination in very first attempt with good marks in practical subject as well as theoretical subject this can be possible only because of koncept Education and the guidance that Yash sir has provide me, Thank you."
