This chapter-wise practice test covers Chapter 6: Cost Sheet - Test 1 for CA Intermediate Group 2 students preparing for the January 2027 examination attempt. It carries 40 marks across 20 questions in case scenarios and standalone practical MCQs with a time limit of 45 minutes and no negative marking.
20 questions across 1 chapter, 40 marks and 45 minutes in the timed paper. Every answer below is shown with the working behind it and the authority it rests on.
Law and standards used: ICAI Study Material for CA Intermediate Paper 4: Cost and Management Accounting (relevant for 2027 attempt).
Questions
20
Marks
40
Time limit
45 minutes
Attempt
January 2027
Group
Group 2
Law basis
ICAI Study Material for CA Intermediate Paper 4: Cost and Management Accounting (relevant for 2027 attempt)
Content as of
2026-11-10
Chapters covered
Chapter 6: Cost Sheet (20 Q)
Questions, answers and explanations
Question 1 · 2 marks · Chapter 6: Cost Sheet · medium
Scenario. Apex Polychem Ltd manufactures industrial polymer compound in a single process. For October 2026, the cost accountant extracted the following data (all amounts in ₹): Opening raw materials 2,40,000; purchases 18,60,000; freight inward 45,000; purchase returns 30,000; closing raw materials 2,15,000. Direct wages 7,20,000; employer's PF 86,400; production bonus 54,000. Direct expenses: royalty 1,10,000 and power 1,60,000. Factory overheads: stores and spares 92,000; depreciation on plant 1,45,000; factory rent 1,25,000; supervisor salary 1,08,000; plant insurance 27,000. Opening WIP 1,80,000; closing WIP 2,10,000. Scrap sold 35,000; quality control cost 62,000; production-related administration 75,000; primary packing 48,000. General administration 1,20,000; selling and distribution 90,000. Production was 12,000 units; 10,800 units were sold; there was no opening finished goods. GST input credit is available, so GST is ignored. Primary packing is essential for preservation, scrap credit arises in the factory, and employer PF/bonus are direct employee costs. The company values closing finished goods at cost of production per unit. Prepare a conventional cost sheet and answer the following questions.
What is the cost of raw materials consumed for October 2026?
₹19,00,000 (correct answer)
₹19,45,000
₹18,85,000
₹19,30,000
Answer: A — ₹19,00,000
Explanation. Raw materials consumed = Opening RM + Purchases + Freight inward − Purchase returns − Closing RM = 2,40,000 + 18,60,000 + 45,000 − 30,000 − 2,15,000 = ₹19,00,000. Option b adds purchase returns instead of deducting them; option c deducts freight; option d ignores freight inward.
Where it goes wrong. Treating purchase returns as an addition or omitting freight inward while computing material consumed.
Question 2 · 2 marks · Chapter 6: Cost Sheet · hard
What is the prime cost of Apex Polychem Ltd for October 2026?
₹30,20,400
₹30,30,400 (correct answer)
₹29,70,400
₹30,75,400
Answer: B — ₹30,30,400
Explanation. Prime cost = Materials consumed ₹19,00,000 + Direct employee cost (7,20,000 + 86,400 + 54,000 = ₹8,60,400) + Direct expenses (royalty 1,10,000 + power 1,60,000 = ₹2,70,000) = ₹30,30,400. Option a omits employer PF; option c omits production bonus; option d adds factory rent to prime cost.
Where it goes wrong. Omitting employer PF or production bonus from direct employee cost, or wrongly including factory overhead in prime cost.
Question 5 · 2 marks · Chapter 6: Cost Sheet · medium
Scenario. Vikram Steels Ltd produces alloy pins in a single process. The budgeted output for the quarter is 18,000 units. Each unit requires 5 kg of raw material at ₹64 per kg. Direct wages are 1.5 hours per unit at ₹96 per hour. Direct expenses are ₹35 per unit. Factory overheads include variable overhead at ₹18 per machine hour; each unit requires 2 machine hours. Fixed factory overheads are ₹4,32,000. Opening WIP is ₹1,26,000 and closing WIP is ₹1,58,000. Scrap recovered is ₹24,000; quality control cost is ₹60,000; production-related administration is ₹48,000; primary packing is ₹9 per unit. General administration and selling expenses are not required for these questions. There is no abnormal loss or process loss, GST input credit is available, and all raw materials purchased are issued to production. The company uses a conventional cost sheet. Compute the relevant figures and answer the following questions.
What is the prime cost for the quarter?
₹88,50,000
₹89,82,000 (correct answer)
₹90,54,000
₹89,10,000
Answer: B — ₹89,82,000
Explanation. Material = 18,000 × 5 kg × ₹64 = ₹57,60,000. Direct wages = 18,000 × 1.5 × ₹96 = ₹25,92,000. Direct expenses = 18,000 × ₹35 = ₹6,30,000. Prime cost = 57,60,000 + 25,92,000 + 6,30,000 = ₹89,82,000. Option a omits direct expenses; option c adds fixed factory overhead; option d uses 1 hour per unit for wages.
Where it goes wrong. Using wrong labour hours per unit or adding factory overhead to prime cost.
Question 6 · 2 marks · Chapter 6: Cost Sheet · hard
What is the total factory overhead for the quarter?
₹6,48,000
₹4,32,000
₹10,80,000 (correct answer)
₹11,16,000
Answer: C — ₹10,80,000
Explanation. Variable factory overhead = 18,000 units × 2 machine hours × ₹18 = ₹6,48,000. Fixed factory overhead = ₹4,32,000. Total = ₹10,80,000. Option a takes only variable overhead; option b takes only fixed overhead; option d wrongly uses 2.5 machine hours per unit.
Where it goes wrong. Forgetting either variable or fixed factory overhead, or using total units instead of machine hours.
Question 9 · 2 marks · Chapter 6: Cost Sheet · medium
Scenario. A manufacturer has opening raw materials ₹1,25,000, purchases ₹9,80,000, freight inward ₹22,000, purchase returns ₹15,000 and closing raw materials ₹1,42,000. What is raw material consumed?
A manufacturer has opening raw materials ₹1,25,000, purchases ₹9,80,000, freight inward ₹22,000, purchase returns ₹15,000 and closing raw materials ₹1,42,000. What is raw material consumed?
₹9,70,000 (correct answer)
₹9,85,000
₹9,63,000
₹9,48,000
Answer: A — ₹9,70,000
Explanation. Raw material consumed = Opening ₹1,25,000 + Purchases ₹9,80,000 + Freight ₹22,000 − Returns ₹15,000 − Closing ₹1,42,000 = ₹9,70,000. Option b ignores returns; option c deducts freight; option d deducts both freight and returns twice.
Where it goes wrong. Treating purchase returns as purchases or deducting freight inward.
Question 11 · 2 marks · Chapter 6: Cost Sheet · medium
Scenario. Prime cost is ₹8,40,000, factory overheads are ₹2,10,000, opening WIP is ₹95,000, closing WIP is ₹1,15,000 and scrap sale is ₹18,000. What is the factory cost?
Prime cost is ₹8,40,000, factory overheads are ₹2,10,000, opening WIP is ₹95,000, closing WIP is ₹1,15,000 and scrap sale is ₹18,000. What is the factory cost?
₹10,12,000
₹10,48,000
₹10,30,000 (correct answer)
₹10,66,000
Answer: C — ₹10,30,000
Explanation. Factory cost = Prime ₹8,40,000 + Factory OH ₹2,10,000 + Opening WIP ₹95,000 − Closing WIP ₹1,15,000 = ₹10,30,000. Scrap credit is considered after factory cost in the conventional cost sheet. Option a wrongly deducts scrap; option b ignores opening WIP; option d adds closing WIP.
Where it goes wrong. Deducting scrap before factory cost or misplacing WIP adjustment.
Question 12 · 2 marks · Chapter 6: Cost Sheet · hard
Scenario. Factory cost is ₹12,40,000; QC cost ₹45,000; production-related administration ₹38,000; scrap credit ₹22,000; primary packing ₹31,000. What is the cost of production?
Factory cost is ₹12,40,000; QC cost ₹45,000; production-related administration ₹38,000; scrap credit ₹22,000; primary packing ₹31,000. What is the cost of production?
₹13,54,000
₹13,10,000
₹13,76,000
₹13,32,000 (correct answer)
Answer: D — ₹13,32,000
Explanation. Cost of production = ₹12,40,000 + ₹45,000 + ₹38,000 − ₹22,000 + ₹31,000 = ₹13,32,000. Option a adds scrap instead of deducting it; option b omits primary packing; option c omits scrap credit.
Where it goes wrong. Adding scrap credit or omitting primary packing in cost of production.
Question 14 · 2 marks · Chapter 6: Cost Sheet · hard
Scenario. COGS is ₹9,80,000; general administration ₹75,000; selling ₹58,000; distribution ₹42,000; secondary packing ₹25,000. What is cost of sales before finance charges?
COGS is ₹9,80,000; general administration ₹75,000; selling ₹58,000; distribution ₹42,000; secondary packing ₹25,000. What is cost of sales before finance charges?
₹12,10,000
₹11,80,000 (correct answer)
₹11,55,000
₹12,35,000
Answer: B — ₹11,80,000
Explanation. Cost of sales before finance charges = COGS ₹9,80,000 + General admin ₹75,000 + Selling ₹58,000 + Distribution ₹42,000 + Secondary packing ₹25,000 = ₹11,80,000. Option a includes interest; option c omits secondary packing; option d omits distribution.
Where it goes wrong. Including finance charges in operating cost of sales or omitting secondary packing.
Question 15 · 2 marks · Chapter 6: Cost Sheet · medium
Scenario. Cost of production is ₹18,00,000 for 20,000 units; 18,500 units are sold and there is no opening finished goods. What is the value of closing finished goods?
Cost of production is ₹18,00,000 for 20,000 units; 18,500 units are sold and there is no opening finished goods. What is the value of closing finished goods?
₹1,20,000
₹1,50,000
₹1,35,000 (correct answer)
₹1,62,000
Answer: C — ₹1,35,000
Explanation. Closing units = 20,000 − 18,500 = 1,500. Cost per unit = ₹18,00,000 ÷ 20,000 = ₹90. Closing FG = 1,500 × ₹90 = ₹1,35,000. Option a values 1,333 units; option b uses 1,667 units; option d uses ₹108 per unit.
Where it goes wrong. Using units sold instead of closing units or applying a wrong cost per unit.
Question 16 · 2 marks · Chapter 6: Cost Sheet · hard
Scenario. Sales are ₹22,00,000; cost of sales before subsidy is ₹18,40,000; a government subsidy of ₹40,000 is receivable and relates to the product. What is profit?
Sales are ₹22,00,000; cost of sales before subsidy is ₹18,40,000; a government subsidy of ₹40,000 is receivable and relates to the product. What is profit?
₹3,60,000
₹4,40,000
₹3,20,000
₹4,00,000 (correct answer)
Answer: D — ₹4,00,000
Explanation. Subsidy reduces the cost object: adjusted cost of sales = ₹18,40,000 − ₹40,000 = ₹18,00,000. Profit = Sales ₹22,00,000 − ₹18,00,000 = ₹4,00,000. Option a adds subsidy to cost; option b ignores subsidy; option c deducts subsidy twice.
Where it goes wrong. Adding subsidy to cost instead of reducing the related cost.
Question 17 · 2 marks · Chapter 6: Cost Sheet · medium
Scenario. Factory cost of ₹9,60,000 includes ₹35,000 wages paid to idle workers during a sudden government-imposed lockdown. What amount should be reported as factory cost after treating abnormal cost?
Factory cost of ₹9,60,000 includes ₹35,000 wages paid to idle workers during a sudden government-imposed lockdown. What amount should be reported as factory cost after treating abnormal cost?
₹9,25,000 (correct answer)
₹9,60,000
₹9,05,000
₹9,40,000
Answer: A — ₹9,25,000
Explanation. Abnormal idle wages arising from a sudden lockdown are abnormal costs and are excluded from cost of production. Reported factory cost = ₹9,60,000 − ₹35,000 = ₹9,25,000. Option b ignores abnormal treatment; option c deducts ₹55,000; option d deducts only ₹20,000.
Where it goes wrong. Including abnormal lockdown idle wages in normal factory cost.
Question 18 · 2 marks · Chapter 6: Cost Sheet · hard
Scenario. Royalty based on production ₹1,25,000; hire charges for job-specific equipment ₹45,000; product-specific software cost ₹30,000; general factory rent ₹60,000. What is the amount of direct expenses?
Royalty based on production ₹1,25,000; hire charges for job-specific equipment ₹45,000; product-specific software cost ₹30,000; general factory rent ₹60,000. What is the amount of direct expenses?
₹1,70,000
₹2,00,000 (correct answer)
₹2,30,000
₹2,60,000
Answer: B — ₹2,00,000
Explanation. Direct expenses = Royalty ₹1,25,000 + Job-specific equipment hire ₹45,000 + Product-specific software ₹30,000 = ₹2,00,000. General factory rent is a factory overhead, not a direct expense. Option a omits software; option c includes factory rent; option d includes rent and double-counts software.
Where it goes wrong. Classifying general factory rent as a direct expense.
Question 19 · 2 marks · Chapter 6: Cost Sheet · medium
Scenario. A worker is paid for 1,200 hours, including 160 overtime hours. Basic rate is ₹85 per hour and overtime is paid at 1.5 times. What is total direct wages?
A worker is paid for 1,200 hours, including 160 overtime hours. Basic rate is ₹85 per hour and overtime is paid at 1.5 times. What is total direct wages?
₹1,02,000
₹1,15,600
₹1,08,800 (correct answer)
₹1,06,800
Answer: C — ₹1,08,800
Explanation. Basic wages = 1,200 × ₹85 = ₹1,02,000. Overtime premium = 160 × ₹85 × 50% = ₹6,800. Total = ₹1,08,800. Option a ignores overtime premium; option b treats overtime premium at full; option d uses 80 overtime hours.
Where it goes wrong. Paying overtime premium at full rate instead of 50% premium when overtime is 1.5 times.
Question 20 · 2 marks · Chapter 6: Cost Sheet · hard
Scenario. Prime cost is ₹6,00,000; factory overheads ₹1,20,000; opening WIP ₹40,000; closing WIP ₹60,000; QC cost ₹18,000; primary packing ₹22,000. Production is 8,000 units. What is cost of production per unit?
Prime cost is ₹6,00,000; factory overheads ₹1,20,000; opening WIP ₹40,000; closing WIP ₹60,000; QC cost ₹18,000; primary packing ₹22,000. Production is 8,000 units. What is cost of production per unit?
₹90.00
₹95.00
₹91.25
₹92.50 (correct answer)
Answer: D — ₹92.50
Explanation. Cost of production = Prime ₹6,00,000 + Factory OH ₹1,20,000 + Opening WIP ₹40,000 − Closing WIP ₹60,000 + QC ₹18,000 + Primary packing ₹22,000 = ₹7,40,000. Per unit = ₹7,40,000 ÷ 8,000 = ₹92.50. Option a omits QC and packing; option b ignores WIP adjustment; option c omits primary packing.
Where it goes wrong. Omitting QC or primary packing while computing cost of production per unit.
ICAI SM: Cost and Management Accounting, Chapter 6 (Cost Sheet)
Questions people ask
What does this Chapter 6: Cost Sheet - Test 1 practice test cover?
This practice test carries 40 marks across 20 questions covering core costing principles, cost accounting standards, formulas, mathematical models, and practical ICAI case scenarios.
How many questions are there and what is the time limit?
There are 20 questions carrying 2 marks each, giving a maximum score of 40 marks in 45 minutes with no negative marking.
Which study material and syllabus apply to these questions?
Questions strictly reflect the official ICAI Study Material for CA Intermediate Paper 4 Cost and Management Accounting for the 2027 examination sessions.
Can I sit this test in both exam and practice modes?
Yes. Practice mode gives immediate answers with mathematical step-by-step workings and trap explanations after each question. Exam mode simulates actual exam conditions with a live timer and issues a downloadable performance certificate.
