This chapter-wise practice test covers Chapter 9: Job Costing - Test 1 for CA Intermediate Group 2 students preparing for the January 2027 examination attempt. It carries 30 marks across 15 questions in case scenarios and standalone practical MCQs with a time limit of 35 minutes and no negative marking.
15 questions across 1 chapter, 30 marks and 35 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
15
Marks
30
Time limit
35 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 9: Job Costing (15 Q)
Questions, answers and explanations
Question 1 · 2 marks · Chapter 9: Job Costing · medium
Scenario. Precision Tools Ltd. manufactures special-purpose machine components against specific customer orders. On 1 October 2026, work-in-progress consisted of Job P-41 and Job P-42. Job P-43 was started during October. The company uses a job cost card for each order and records direct materials, direct labour and absorbed factory overhead separately. The following data relate to October 2026:
Opening WIP: P-41 — DM ₹18,000, DL ₹12,000, OH ₹9,000; P-42 — DM ₹30,000, DL ₹20,000, OH ₹15,000.
Material requisitions: P-41 ₹28,000; P-42 ₹46,500; P-43 ₹62,000. Materials returned to stores from P-42: ₹3,500. Material transfer note: materials costing ₹5,000 issued to P-43 were transferred to P-41.
Direct labour: Dept A rate ₹120/hour, Dept B ₹90/hour. P-41: A 180 hrs, B 120 hrs; P-42: A 240 hrs, B 200 hrs; P-43: A 320 hrs, B 260 hrs. P-43 included 40 overtime hours in Dept A due to customer's urgent request; overtime premium is 50% of the normal rate and is chargeable to the job. Idle time of 20 hours in Dept B was not attributable to any job; it is treated as factory overhead.
Factory overhead absorption rates: Dept A ₹60 per labour hour, Dept B ₹45 per labour hour. Jobs P-41 and P-42 were completed in October; P-43 remained in progress. All amounts are in Indian rupees. There was no other WIP.
What is the total material cost charged to Job P-42 for October, including opening work-in-progress?
₹69,500
₹73,000 (correct answer)
₹76,500
₹80,000
Answer: B — ₹73,000
Explanation. Opening material for P-42 ₹30,000 + October issues ₹46,500 – return ₹3,500 = ₹73,000. The ₹5,000 transfer relates to P-41 and P-43, not P-42. Option (a) omits opening WIP; (c) deducts the return twice or misuses the transfer; (d) adds the transfer. Trap: adding or ignoring opening WIP.
Where it goes wrong. Students omit opening WIP or wrongly add an inter-job material transfer to P-42.
Question 3 · 2 marks · Chapter 9: Job Costing · medium
What is the factory overhead absorbed by Job P-41 during October?
₹15,000
₹17,400
₹18,000
₹16,200 (correct answer)
Answer: D — ₹16,200
Explanation. P-41 overhead = Dept A 180 × ₹60 = ₹10,800 + Dept B 120 × ₹45 = ₹5,400 = ₹16,200. Idle time is not absorbed by P-41; it is factory overhead. Options use opening OH or wrong hours. Trap: using total labour hours or including idle time in job absorption.
Where it goes wrong. Students add idle-time cost to the job or use the wrong department rate.
Question 5 · 2 marks · Chapter 9: Job Costing · medium
Scenario. Zenith Print & Packaging Ltd. undertakes customised printing jobs. Job Z-101 for 12,000 brochures was received from a customer. The job cost card shows the following for the job:
Direct materials: paper ₹2,40,000; ink ₹36,000; plates ₹24,000.
Direct labour: machine operators 800 hours @ ₹180 per hour; helpers 500 hours @ ₹90 per hour.
Factory overheads are absorbed department-wise: printing department ₹180 per machine hour; finishing department ₹60 per helper labour hour. The job used 700 machine hours in printing and 500 helper hours in finishing.
Administration and selling overheads are charged at 15% of factory cost. The company adds a profit margin of 20% on total cost to arrive at the quotation price. There was no opening or closing work-in-progress for this job. The job was completed and delivered within the agreed time. The printing department is machine-intensive, whereas finishing is labour-intensive. The customer has sought a firm quotation before placing a repeat order. The production manager has certified the machine and labour hours used on the job. There was no abnormal spoilage or rework. All amounts are in Indian rupees.
What is the prime cost of Job Z-101?
₹4,70,000
₹4,95,000
₹4,89,000 (correct answer)
₹5,00,000
Answer: C — ₹4,89,000
Explanation. Prime cost = direct materials ₹2,40,000 + ₹36,000 + ₹24,000 = ₹3,00,000 + direct labour ₹1,44,000 + ₹45,000 = ₹1,89,000 = ₹4,89,000. Option (a) omits plates; (b) adds overhead; (d) uses helper hours at the machine rate. Trap: including factory overhead in prime cost.
Where it goes wrong. Students add factory overhead while computing prime cost.
Question 8 · 2 marks · Chapter 9: Job Costing · hard
What quotation price should be charged for Job Z-101?
₹8,70,000
₹8,90,100 (correct answer)
₹8,80,000
₹9,00,000
Answer: B — ₹8,90,100
Explanation. Quotation = total cost ₹7,41,750 × 1.20 = ₹8,90,100. Profit is 20% on total cost. Option (a) uses 20% of factory cost; (c) uses an 18% markup; (d) uses a 25% markup. Trap: applying profit on factory cost instead of total cost.
Where it goes wrong. Students apply the profit margin to factory cost rather than total cost.
Question 9 · 2 marks · Chapter 9: Job Costing · medium
Scenario. During October, stores issued direct materials of ₹4,80,000 to various jobs. Direct materials returned to stores by jobs amounted to ₹15,000. Materials costing ₹20,000 were transferred from Job 12 to Job 18. What amount should be debited to Work-in-Process Control Account for direct materials?
During October, stores issued direct materials of ₹4,80,000 to various jobs. Direct materials returned to stores by jobs amounted to ₹15,000. Materials costing ₹20,000 were transferred from Job 12 to Job 18. What amount should be debited to Work-in-Process Control Account for direct materials?
₹4,80,000
₹4,45,000
₹4,65,000 (correct answer)
₹5,00,000
Answer: C — ₹4,65,000
Explanation. WIP Control Dr = direct materials issued ₹4,80,000 – returns ₹15,000 = ₹4,65,000. Inter-job transfer ₹20,000 only reallocates between job accounts; no net WIP control entry. Option (a) ignores returns; (b) ignores both; (d) ignores both and adds transfer. Trap: treating inter-job transfer as a credit to WIP Control.
Where it goes wrong. Students wrongly reduce WIP Control for an inter-job material transfer.
Question 10 · 2 marks · Chapter 9: Job Costing · hard
Scenario. Job 707 was completed at a total cost of ₹2,50,000 before considering spoilage. 5% of the output was spoiled. Normal spoilage is 2% of output. The spoiled units realised ₹3,000. What amount should be charged to Costing Profit & Loss Account as abnormal loss?
Job 707 was completed at a total cost of ₹2,50,000 before considering spoilage. 5% of the output was spoiled. Normal spoilage is 2% of output. The spoiled units realised ₹3,000. What amount should be charged to Costing Profit & Loss Account as abnormal loss?
₹5,700 (correct answer)
₹4,500
₹6,000
₹7,500
Answer: A — ₹5,700
Explanation. Spoilage cost = 5% × ₹2,50,000 = ₹12,500. Normal = 2% × ₹2,50,000 = ₹5,000. Abnormal = ₹7,500. Realisable ₹3,000 apportioned 5,000:7,500 = 2:3; abnormal scrap = ₹1,800. Abnormal loss to P&L = ₹7,500 – ₹1,800 = ₹5,700. Option (b) ignores scrap; (c) treats all spoilage as normal; (d) charges gross abnormal. Trap: not apportioning scrap between normal and abnormal.
Where it goes wrong. Students charge the full abnormal spoilage cost without deducting its share of realisable value.
Question 11 · 2 marks · Chapter 9: Job Costing · medium
Scenario. Job 88 required 100 overtime hours to meet a customer's urgent delivery schedule. The normal wage rate is ₹200 per hour and overtime is paid at 150% of normal rate. In addition, 40 overtime hours were worked due to a machine breakdown and are not attributable to any job. What amount of overtime premium should be charged directly to Job 88?
Job 88 required 100 overtime hours to meet a customer's urgent delivery schedule. The normal wage rate is ₹200 per hour and overtime is paid at 150% of normal rate. In addition, 40 overtime hours were worked due to a machine breakdown and are not attributable to any job. What amount of overtime premium should be charged directly to Job 88?
₹14,000
₹4,000
₹20,000
₹10,000 (correct answer)
Answer: D — ₹10,000
Explanation. Overtime premium directly attributable to Job 88 = 100 hrs × (50% × ₹200) = ₹10,000. Normal wages for those hours are already direct labour. Machine-breakdown premium 40 × ₹100 = ₹4,000 is indirect, charged to overhead. Option (a) includes breakdown premium; (b) charges only breakdown; (c) uses full overtime rate. Trap: charging all overtime premium to the job.
Where it goes wrong. Students charge the entire overtime premium to the job instead of only the customer-specific portion.
Question 12 · 2 marks · Chapter 9: Job Costing · hard
Scenario. A worker is paid for 800 hours in a month at ₹150 per hour. Productive time was 720 hours. Idle time of 80 hours includes 60 hours due to normal machine setting and 20 hours due to an abnormal power failure. How much idle time cost should be charged to Factory Overhead Control?
A worker is paid for 800 hours in a month at ₹150 per hour. Productive time was 720 hours. Idle time of 80 hours includes 60 hours due to normal machine setting and 20 hours due to an abnormal power failure. How much idle time cost should be charged to Factory Overhead Control?
₹12,000
₹9,000 (correct answer)
₹3,000
₹15,000
Answer: B — ₹9,000
Explanation. Idle time cost = 80 × ₹150 = ₹12,000. Normal idle 60 × ₹150 = ₹9,000 to Factory OH; abnormal 20 × ₹150 = ₹3,000 to Costing P&L. Option (a) is total idle; (c) is abnormal; (d) is productive labour. Trap: charging abnormal idle time to overhead.
Where it goes wrong. Students charge abnormal idle time to Factory Overhead instead of Costing P&L.
Question 13 · 2 marks · Chapter 9: Job Costing · medium
Scenario. A job has factory cost of ₹4,50,000. Administration overhead is 10% of factory cost. Selling overhead is 5% of sales value. The company wants a profit of 20% on sales value. What is the quotation price?
A job has factory cost of ₹4,50,000. Administration overhead is 10% of factory cost. Selling overhead is 5% of sales value. The company wants a profit of 20% on sales value. What is the quotation price?
₹6,60,000 (correct answer)
₹6,18,750
₹6,50,000
₹6,75,000
Answer: A — ₹6,60,000
Explanation. Admin OH = 10% × ₹4,50,000 = ₹45,000. Let sales = S. S = ₹4,50,000 + ₹45,000 + 0.05S + 0.20S = ₹4,95,000 + 0.25S. 0.75S = ₹4,95,000; S = ₹6,60,000. Option (b) treats selling OH as % of cost; (c) omits selling OH; (d) uses 25% profit on cost. Trap: applying selling overhead on cost instead of sales.
Where it goes wrong. Students apply selling overhead and profit on cost rather than on sales value.
Question 14 · 2 marks · Chapter 9: Job Costing · hard
Scenario. A job order consists of 500 units. Direct materials cost ₹80,000; direct labour ₹50,000; factory overhead is absorbed at 60% of direct labour. What is the cost per unit?
A job order consists of 500 units. Direct materials cost ₹80,000; direct labour ₹50,000; factory overhead is absorbed at 60% of direct labour. What is the cost per unit?
₹300
₹340
₹320 (correct answer)
₹360
Answer: C — ₹320
Explanation. Total job cost = DM ₹80,000 + DL ₹50,000 + OH (60% × ₹50,000 = ₹30,000) = ₹1,60,000. Cost per unit = ₹1,60,000 ÷ 500 = ₹320. Option (a) omits OH; (b) uses 70% OH; (d) uses 80% OH. Trap: applying overhead on prime cost or forgetting it.
Where it goes wrong. Students compute overhead on prime cost or omit it from total job cost.
Question 15 · 2 marks · Chapter 9: Job Costing · medium
Scenario. Job 55 remained in progress at month-end. Opening WIP was ₹40,000. During the month, direct materials issued were ₹90,000, of which ₹8,000 was returned to stores; materials costing ₹12,000 were transferred to Job 56. Direct labour was 1,000 hours @ ₹80. Factory overhead is absorbed at ₹50 per direct labour hour. What is the closing WIP of Job 55?
Job 55 remained in progress at month-end. Opening WIP was ₹40,000. During the month, direct materials issued were ₹90,000, of which ₹8,000 was returned to stores; materials costing ₹12,000 were transferred to Job 56. Direct labour was 1,000 hours @ ₹80. Factory overhead is absorbed at ₹50 per direct labour hour. What is the closing WIP of Job 55?
₹2,30,000
₹2,50,000
₹2,20,000
₹2,40,000 (correct answer)
Answer: D — ₹2,40,000
Explanation. Closing WIP = opening ₹40,000 + net materials (₹90,000 – ₹8,000 return – ₹12,000 transfer) ₹70,000 + labour 1,000 × ₹80 = ₹80,000 + OH 1,000 × ₹50 = ₹50,000 = ₹2,40,000. Option (a) deducts transfer twice; (b) ignores return; (c) omits OH. Trap: treating inter-job transfer as direct material issued to the job.
Where it goes wrong. Students omit the material return or incorrectly add the inter-job transfer back to the job.
ICAI SM: Cost and Management Accounting, Chapter 9 (Job Costing)
Questions people ask
What does this Chapter 9: Job Costing - Test 1 practice test cover?
This practice test carries 30 marks across 15 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 15 questions carrying 2 marks each, giving a maximum score of 30 marks in 35 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.
