Opening WIP 500 Transferred To Finished Goods 3,400 Quantity Introduced (Balancing Figure) 3,800 Total Loss 800 Closing WIP 100 4,300 4,300

Mock Test Paper - Series I: March, 2024
Date of Paper: 12 March, 2024

Time of Paper: 2 P.M. to 5 P.M.
Test Series: March 2024
INTERMEDIATE: GROUP – II
PAPER – 4: COST AND MANAGEMENT ACCOUNTING
Suggested Answers/ Solution
PART I – Case Scenario based MCQs
1. i. D
Inflow into process Litres Outflow from process Litres
Opening WIP 500 Transferred to finished 3,400
goods
Quantity introduced 3,800 Total loss 800
(Balancing figure)
Closing WIP 100
4,300 4,300
ii. A
Total loss 800 litres
Normal loss (10% of fresh input i.e. 3,800) 380 litres
Abnormal loss 420 litres
iii. B
Calculation of Equivalent production units
Equivalent Production
Output
Input Details Units Units Material Labour Overheads
Particulars
% Units % Units % Units
Opening WIP 500 From 500 - - 20 100 40 200
Opening WIP
Fresh inputs 3,800 From fresh 2900 100 2900 100 2900 100 2900
units
Normal loss 380 - - -
Closing WIP 100 100 100 20 20 10 10
Abnormal 420 100 420 100 420 100 420
loss
4,300 4,300 3,420 3,440 3,530
1
Value of raw materials introduced during the month
Equivalent Cost per EU Total cost
units (`) (`)
Total value of raw material 3420 300 10,26,000
Add: Scrap value of normal 380 20 7,600
loss
Value of raw material 10,33,600
introduced
iv. A
Value of labour and overhead in closing Work in process
Cost elements Equivalent Cost per EU Total cost

units (`) (`)
Labour 20 200 4,000
Overheads 10 160 1,600
v. C
Value of output transferred to finished goods
Output transferred (Units) × Equivalent cost per unit
3,400 Litres × `660 = `22,44,000
2. i. D
ii. C Please refer cost sheet below for cost of production
Cost of production per manshift =
Cost of production ÷ Total manshift
` 7,87,28,000 ÷ 46,800 = `1,682.22
iii. A Car hire charges including GST @5%, please refer the cost sheet
iv. B Selling and distribution cost includes the following:
Maintenance cost for weighing bridge 12,000
AMC cost of CCTV installed at weigh bridge 8,000
TA/ DA & hotel bill of sales manager 36,000
56,000
For Cost of Sale please refer the cost sheet

v. A Manshift = 1,800 employees × 26 days = 46,800 manshifts
Computation of earnings per manshift (EMS):
2
Total employee benefits paid
EMS =
Manshift
` 7,04,20,000
= =` 1504.70
46,800
Computation of Output per manshift (OMS):
Total Output/ Production
OMS=
Manshift
2,34,000 Tonne
= = 5 tonnes
46,800
Workings
Cost Sheet of M Ltd. for the last month
Particulars Amount (`) Amount (`)
Materials consumed 50,00,000
Wages & Salary 6,40,00,000
Gratuity & leave encashment 64,20,000 7,04,20,000
Power cost (13,000 kwh × `8) 1,04,000
Diesel cost (2,000 ltr × `93) 1,86,000 2,90,000
HEMM hiring charges 30,00,000
Prime Cost 7,87,10,000
AMC cost of CCTV installed at factory 18,000
premises
Cost of Production/ Cost of Goods 7,87,28,000
Sold
Hiring charges of cars 66,000
Reimbursement of diesel cost 22,000
88,000
Add: GST @5% on RCM basis 4,400 92,400
Maintenance cost for weighing bridge 12,000
AMC cost of CCTV installed at weigh 8,000 20,000
bridge
TA/ DA & hotel bill of sales manager 36,000
Cost of Sales 7,88,76,400
3. D Labour rate variance = Standard time for actual production (SR- AR)
7,500 (A) = (30,000 × 30 minutes/60 minutes) × (50-AR)
AR = (7,50,000 + 7,500)/15,000 = `50.50 per hour
3
Actual wages per unit = 50.50/2 = `25.25
4. B Variable overhead for each % of level of activity
, , , ,
= = 40,000
Fixed cost = 30,00,000 – (40,000 × 50) = 10,00,000
Total overheads for 60% level of activity
= 10,00,000 + (40,000 × 60) = 34,00,000
5. C
6. B Actual Overhead – (Actual machine hours × machine hour rate)
5,20,000 – (17040 × 30) = 8,800 under absorbed
7. A Optimum batch size or Economic Batch Quantity (EBQ):
2DS 2  80,000  3,500
EBQ = C = 12 = 6,832 units.
Number of Optimum runs = 80,000 ÷ 6,832 = 11.70 or 12 run
PART-II
1. (a) (i) Production Budget (in units) for the year ended 31 st March
2025
Product X Product Y
Budgeted sales (units) 28,000 13,000
Add: Increase in closing stock 320 160
No. good units to be produced 28,320 13,160
Post production rejection rate 4% 6%
No. of units to be produced 29,500 14,000
 28,320   13,160 
   
 0.96   0.94 
(ii) Calculation of Economic Order Quantity for Material Z

× , , × , , , × ,
EOQ = = = 31,526.95 kg.
× % × %
(b) Purchase budget (in kgs and value) for Material Z

Product X Product
Y
No. of units to be produced 29,500 14,000
Usage of Material Z per unit of 5 kg. 6 kg.
production
Material needed for production 1,47,500 kg. 84,000 kg.
4

Opening WIP 500 Transferred To Finished Goods 3,400 Quantity Introduced (Balancing Figure) 3,800 Total Loss 800 Closing WIP 100 4,300 4,300

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Opening WIP 500 Transferred To Finished Goods 3,400 Quantity Introduced (Balancing Figure) 3,800 Total Loss 800 Closing WIP 100 4,300 4,300

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Mock Test Paper - Series I: March, 2024

Date of Paper: 12 March, 2024

Cost elements Equivalent Cost per EU Total cost

For Cost of Sale please refer the cost sheet

(ii) Calculation of Economic Order Quantity for Material Z

(b) Purchase budget (in kgs and value) for Material Z

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