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Past papers › Cost & Mgmt › January 2026

CA Inter Cost & Mgmt — Mock Test Paper (MTP) — January 2026

This page contains all 16 questions from the CA Inter Cost & Management Accounting Mock Test Paper (MTP) for the January 2026 attempt cycle, sourced from VSI Jaipur.

QII.6(c)-ORFlexible budget – situations where it is suitable
4 marks medium
EXPLAIN the suitability for flexible budget.
Q1Fixed cost computation from average cost-volume data
2 marks hard
Case: Bharat Pharma Ltd was established three years ago by biotechnology researchers to commercialise a new therapeutic drug. The production technology is highly sophisticated and capital-intensive, resulting in very high fixed manufacturing costs. The plant's maximum production capacity is 90,000 vials. CEO Dr. Kavita Rao demonstrated how average cost per unit decreases as production approaches full capacity. Production volume vs. Average cost per vial: 50,000 vials → ₹3,400 | 60,000 vials → ₹3,050 | 75,000 vials → ₹2,700 | 90,000 vials → ₹2,466.66 Current annual sales and production: 78,000 vial…
What are the total fixed costs of Bharat Pharma Ltd?
(A) ₹ 6.5 crore
(B) ₹ 8.4 crore
(C) ₹ 10.5 crore
(D) ₹ 12.3 crore
Q2Profit calculation at current production volume
2 marks hard
Case: Bharat Pharma Ltd was established three years ago by biotechnology researchers to commercialise a new therapeutic drug. The production technology is highly sophisticated and capital-intensive, resulting in very high fixed manufacturing costs. The plant's maximum production capacity is 90,000 vials. CEO Dr. Kavita Rao demonstrated how average cost per unit decreases as production approaches full capacity. Production volume vs. Average cost per vial: 50,000 vials → ₹3,400 | 60,000 vials → ₹3,050 | 75,000 vials → ₹2,700 | 90,000 vials → ₹2,466.66 Current annual sales and production: 78,000 vial…
What is the profit at the current sales volume of 78,000 vials?
(A) ₹ 4.2 crore
(B) ₹ 7.1 crore
(C) ₹ 9.78 crore
(D) ₹ 11.3 crore
Q3Break-even point and margin of safety
2 marks hard
Case: Bharat Pharma Ltd was established three years ago by biotechnology researchers to commercialise a new therapeutic drug. The production technology is highly sophisticated and capital-intensive, resulting in very high fixed manufacturing costs. The plant's maximum production capacity is 90,000 vials. CEO Dr. Kavita Rao demonstrated how average cost per unit decreases as production approaches full capacity. Production volume vs. Average cost per vial: 50,000 vials → ₹3,400 | 60,000 vials → ₹3,050 | 75,000 vials → ₹2,700 | 90,000 vials → ₹2,466.66 Current annual sales and production: 78,000 vial…
What is the break-even point (units) and margin of safety (as a percentage)?
(A) 25,450 units and 52.25%
(B) 32,900 units and 60%
(C) 40,385 units and 48.22%
(D) 50,200 units and 40%
Q4Marginal costing – special order decision (8,000 vials at ₹2
2 marks hard
Case: Bharat Pharma Ltd was established three years ago by biotechnology researchers to commercialise a new therapeutic drug. The production technology is highly sophisticated and capital-intensive, resulting in very high fixed manufacturing costs. The plant's maximum production capacity is 90,000 vials. CEO Dr. Kavita Rao demonstrated how average cost per unit decreases as production approaches full capacity. Production volume vs. Average cost per vial: 50,000 vials → ₹3,400 | 60,000 vials → ₹3,050 | 75,000 vials → ₹2,700 | 90,000 vials → ₹2,466.66 Current annual sales and production: 78,000 vial…
What is the change in profit if the company accepts the order for 8,000 vials at ₹2,550?
(A) Increase of ₹ 82 lakh
(B) Increase of ₹ 1 crore
(C) Increase of ₹ 2.1 crore
(D) No change in profit
Q5Marginal costing – special order decision (20,000 vials at ₹
2 marks hard
Case: Bharat Pharma Ltd was established three years ago by biotechnology researchers to commercialise a new therapeutic drug. The production technology is highly sophisticated and capital-intensive, resulting in very high fixed manufacturing costs. The plant's maximum production capacity is 90,000 vials. CEO Dr. Kavita Rao demonstrated how average cost per unit decreases as production approaches full capacity. Production volume vs. Average cost per vial: 50,000 vials → ₹3,400 | 60,000 vials → ₹3,050 | 75,000 vials → ₹2,700 | 90,000 vials → ₹2,466.66 Current annual sales and production: 78,000 vial…
What is the change in profit if the company accepts the order for 20,000 vials at ₹2,500?
(A) Increase of ₹ 1.68 crore
(B) Increase of ₹ 0.32 crore
(C) Increase of ₹ 2.8 crore
(D) Decrease of ₹ 1.1 crore
Q6Service cost per unit – cost per library member
2 marks hard
Case: The Greenfield Recreation Club operates a public library for its members and provides an annual subsidy of up to ₹6 per club member drawn from general funds. Operational details for the current year: • Total active club members: 4,800; Library members: 1,200 • Monthly library membership fee: ₹110 per member • Late return fine: ₹2 per book per day; 450 books returned late per month, each delayed ~6 days • Old book collection: 60,000 books requiring maintenance at ₹15 per book per year • New book purchases: 1,000 books per year at ₹320 each • Staff (monthly): 1 Librarian @ ₹12,000; 3 Assistant …
What is the Cost incurred per library member per month (excluding cost of new books)?
(A) ₹ 96.67
(B) ₹ 55.00
(C) ₹ 61.25
(D) ₹ 73.75
Q7Service cost per unit – cost per club member
2 marks hard
Case: The Greenfield Recreation Club operates a public library for its members and provides an annual subsidy of up to ₹6 per club member drawn from general funds. Operational details for the current year: • Total active club members: 4,800; Library members: 1,200 • Monthly library membership fee: ₹110 per member • Late return fine: ₹2 per book per day; 450 books returned late per month, each delayed ~6 days • Old book collection: 60,000 books requiring maintenance at ₹15 per book per year • New book purchases: 1,000 books per year at ₹320 each • Staff (monthly): 1 Librarian @ ₹12,000; 3 Assistant …
What is the Cost incurred per club member per month (excluding cost of new books)?
(A) ₹ 96.67
(B) ₹ 24.17
(C) ₹ 52.25
(D) ₹ 13.75
Q8Net income of library – receipts minus expenditure
2 marks hard
Case: The Greenfield Recreation Club operates a public library for its members and provides an annual subsidy of up to ₹6 per club member drawn from general funds. Operational details for the current year: • Total active club members: 4,800; Library members: 1,200 • Monthly library membership fee: ₹110 per member • Late return fine: ₹2 per book per day; 450 books returned late per month, each delayed ~6 days • Old book collection: 60,000 books requiring maintenance at ₹15 per book per year • New book purchases: 1,000 books per year at ₹320 each • Staff (monthly): 1 Librarian @ ₹12,000; 3 Assistant …
Calculate the Net income earned by the library per year.
(A) ₹ 7,65,200
(B) ₹ 6,42,600
(C) ₹ 4,86,200
(D) ₹ 2,56,800
Q9Book purchase limit vs. subsidy policy
2 marks hard
Case: The Greenfield Recreation Club operates a public library for its members and provides an annual subsidy of up to ₹6 per club member drawn from general funds. Operational details for the current year: • Total active club members: 4,800; Library members: 1,200 • Monthly library membership fee: ₹110 per member • Late return fine: ₹2 per book per day; 450 books returned late per month, each delayed ~6 days • Old book collection: 60,000 books requiring maintenance at ₹15 per book per year • New book purchases: 1,000 books per year at ₹320 each • Staff (monthly): 1 Librarian @ ₹12,000; 3 Assistant …
How many extra books are currently being purchased per year?
(A) 0 books (no excess; purchase is within limit)
(B) 350 books
(C) 198 books
(D) 220 books
Q10Subsidy shortfall calculation
2 marks hard
Case: The Greenfield Recreation Club operates a public library for its members and provides an annual subsidy of up to ₹6 per club member drawn from general funds. Operational details for the current year: • Total active club members: 4,800; Library members: 1,200 • Monthly library membership fee: ₹110 per member • Late return fine: ₹2 per book per day; 450 books returned late per month, each delayed ~6 days • Old book collection: 60,000 books requiring maintenance at ₹15 per book per year • New book purchases: 1,000 books per year at ₹320 each • Staff (monthly): 1 Librarian @ ₹12,000; 3 Assistant …
Calculate the amount of more subsidy required.
(A) ₹ 63,360
(B) ₹ 42,600
(C) ₹ 86,200
(D) ₹ 21,500
Q11Capacity utilisation ratio and efficiency ratio – standard h
2 marks easy
A manufacturing unit has budgeted standard hours of 15,000 for May 2025. During the month, the capacity utilisation ratio was 85%, while the efficiency ratio stood at 110%. The factory reported smooth operations with no major downtime. The standard hours allowed for May 2025 was:
(A) 14,025
(B) 13,200
(C) 15,750
(D) 12,900
Q12Maximum stock level calculation
2 marks easy
The cost of placing each purchase order is ₹20, and the company plans to purchase 5,000 units during the year at a purchase price of ₹50 per unit, inclusive of transportation charges. The annual storage cost per unit is ₹5. The lead time varies, with an average of 10 days, a maximum of 15 days, and a minimum of 5 days. The rate of consumption also fluctuates, with an average usage of 15 units per day and a maximum usage of 20 units per day. The maximum stock level is:
(A) 450 units
(B) 300 units
(C) 375 units
(D) 500 units
Q13Employee/labour hour rate computation
2 marks easy
A worker receives the following monthly earnings: Basic Pay ₹12,000; Dearness Allowance ₹4,000; Fringe Benefits ₹1,500. There are 305 working days in a year, of which 25 days are paid holidays. Assume 8 working hours per day. What is the employee hour rate?
(A) ₹ 93.75 per hour
(B) ₹ 85.50 per hour
(C) ₹ 97.25 per hour
(D) ₹ 102.00 per hour
Q14Activity-Based Costing – overhead allocation to Product A
2 marks easy
A company manufactures Product A and Product B and uses Activity-Based Costing. The following activity data relates to the current month: Machine Setup: Cost ₹60,000; Cost driver – number of setups; Total 120 setups; Product A 30 setups; Product B 90 setups. Quality Inspection: Cost ₹40,000; Cost driver – number of inspections; Total 200 inspections; Product A 50 inspections; Product B 150 inspections. What is the total overhead cost assigned to Product A under ABC?
(A) ₹ 35,000
(B) ₹ 25,000
(C) ₹ 30,000
(D) ₹ 40,000
Q15Job costing – total cost computation
2 marks easy
The following details are available for a job: Material issued ₹60,000; return to stores ₹8,000. Dept A labour: 80 hrs @ ₹180/hr; OH rate = 120% of labour. Dept B labour: 50 hrs @ ₹150/hr; OH rate = ₹200 per labour hour. Total job cost is:
(A) ₹ 1,04,600
(B) ₹ 1,06,800
(C) ₹ 1,12,400
(D) ₹ 1,01,180