CA Inter Cost & Mgmt — Suggested Answers — September 2025
This page contains all 12 questions from the CA Inter Cost & Management Accounting Suggested Answers for the September 2025 attempt cycle, sourced from ICAI Official.
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Case Scenario - I
The following information pertains to ABC Limited for the period 1st April, 2024 to 31st March, 2025:
Sl. No. | Particulars | Amount (`) | Amount (`)
1 | Royalty paid for production | | 7,76,400
2 | Amount paid for power & fuel | | 2,15,200
3 | Packing cost paid for re-distribution of Finished Goods | | 70,500
4 | Repairs & Maintenance paid for: | | 1,45,000
| - Plant & Machinery | 65,000 |
| - Sales office building | 80,000 |
5 | Insurance premium paid for Plant & Machinery | | 1,17,520
6 | Research & Development cost paid for improvement in production process | | 17,800
7 | Depreciation on office building | | 75,500
8 | Salary paid to General Manager | | 15,50,000
9 | Salary & bonus paid to Sales & Marketing staff | | 11,40,500
10 | Receipt from sale of scrap and waste generated during production | | 20,000
11 | Value of Stock as on 1st April, 2024: | |
| - Raw materials | | 5,00,000
| - Work-in-process | | 8,40,000
| - Finished goods | | ?
12 | Value of stock as on 31st March, 2025: | |
| - Raw materials | | 1,10,000
| - Work-in-process | | 6,50,000
| - Finished goods | | ?
Other information are as follows:
(i) Raw materials purchased were 15,000 kgs @ ` 300 per kg.
(ii) Freight inwards paid at 4% of the cost of raw materials purchased.
(iii) Wages paid to factory workers was 30% of raw material consumed.
(iv) Closing stock of finished goods was ` 9,90,000 more than the opening stock. The average stock of finished goods was ` 11,55,000.
(v) Sales during the period 1st April, 2024 to 31st March, 2025 was ` 1,10,00,000.
What is the Direct employee (labour) cost?
(A) ` 15,21,000
(B) ` 14,67,000
(C) ` 14,62,500
(D) ` 15,29,500
💡 Show solution MODEL ANSWER
Answer: (A) ₹15,21,000
The Direct Employee (Labour) Cost comprises wages paid to factory workers, which is given as 30% of raw material consumed.
Step 1 — Cost of Raw Materials Purchased: Raw materials purchased = 15,000 kgs × ₹300 = ₹45,00,000 Freight inwards (4% of ₹45,00,000) = ₹1,80,000 Total cost of purchases = ₹46,80,000
Step 2 — Raw Material Consumed: Opening stock of raw materials = ₹5,00,000 Add: Purchases (including freight) = ₹46,80,000 Less: Closing stock of raw materials = ₹1,10,000 Raw Material Consumed = ₹50,70,000
Step 3 — Direct Labour Cost: Wages paid to factory workers = 30% × ₹50,70,000 = ₹15,21,000
Note: The Salary paid to the General Manager (₹15,50,000) is an administration overhead and is not included in direct labour cost. Only factory workers' wages qualify as direct employee cost.
The Direct Employee (Labour) Cost is ₹15,21,000 — Option (A).
📖 ICAI Cost Accounting Study Material — Elements of Cost (Direct Labour)
✍️ How to write this answer (skeleton, phrasings, trap)
📋 THE SKELETON
- Pick the option first, then back-calculate — in a 2-mark MCQ, write 'Answer: (A)' on line 1 so the examiner awards the MCQ mark even if they stop reading. - Compute Raw Material Consumed in one clean chain — Opening stock + Purchases + Freight inwards − Closing stock; show each line separately because freight is the trap step. - Apply the 30% rate explicitly — write '30% × ₹50,70,000 = ₹15,21,000' as its own line; don't embed it mid-sentence or the step mark evaporates. - Exclude GM salary with a one-liner reason — state 'Salary of General Manager is administration overhead, excluded from direct employee cost' to show you know WHY, not just that you dropped it.
🎯 ICAI EXAMINERS REWARD THESE PHRASES
“wages paid to factory workers constitute direct employee (labour) cost”“raw material consumed = opening stock + purchases including freight inwards − closing stock”“being administration overhead, the same is not included in direct employee cost”
⚠️ DON'T FALL FOR THIS
Heads up — the biggest killer here is adding GM salary (₹15,50,000) into direct labour because it says 'salary' and looks factory-ish. The moment you include it you land on a distractor option and lose both marks. Factory workers only — GM is admin overhead, full stop.
⏱ Suggested time: 3 min 36 sec
📋 ICAI Official Suggested Answer (Sep 2025) ICAI
Correct Option: (A) ` 15,21,000
Source: ICAI Board of Studies — Suggested Answer for Sep 2025 · view source PDF on icai.org ↗. Always cross-check with current Finance Act / amended Standards.
Qmcq.10Marginal costing - Profit at reduced sales⚡ Try this Q →
2 marksmedium
Case Scenario - II
JMS Limited, a soft drink company, is intending to introduce a new product viz. 'Herbs Infused Mineral Water' to the market. Annual sales of this new product is estimated at 36,000 units with a selling price of ` 75 per unit. The cost estimates for this new product are as follows:
Elements of Cost | Amount (`)
Direct material consumed | 9,50,000
Direct labour cost | 5,93,750
Manufacturing overheads (variable) | 2,85,000
Manufacturing overheads (fixed) | 1,90,000
General & Administration overheads (variable) | 1,42,500
General & Administration overheads (fixed) | 2,13,750
Selling and distribution overheads (variable) | 80,750
Selling and distribution overheads (fixed) | 64,250
There will be no closing stock of 'Herbs Infused Mineral Water'.
What will be the profit if the actual sales are 10% less than the estimated sales?
(A) ` 1,15,200
(B) ` 1,62,000
(C) ` 1,71,500
(D) ` 1,51,200
🔒 Get the worked solution + bare-Act citation for Marginal costing - Profit at reduced sales
Qmcq.11Standard costing - Material variances⚡ Try this Q →
2 marksmedium
The Cost Accountant of AQ Limited has provided the following information for investigation of variances:
Material Cost Variance ` 4,220 (F)
Material Usage Variance ` 18,540 (A)
Material Yield Variance ` 8,390 (F)
The Management Accountant is not able to comment on the reason of variances as information is not sufficient and seeks your help to find out the correct amount of Material Price Variance and Material Mix Variance. What is the correct amount of Material Price Variance (MPV) and Material Mix Variance (MMV)?
(A) MPV ` 24,880 (A) and MMV ` 27,440 (F)
(B) MPV ` 14,320 (A) and MMV ` 10,150 (F)
(C) MPV ` 14,320 (F) and MMV ` 10,150 (A)
(D) MPV ` 22,760 (F) and MMV ` 26,930 (A)
🔒 Get the worked solution + bare-Act citation for Standard costing - Material variances
Qmcq.14Process costing - Value of output transferred⚡ Try this Q →
2 marksmedium
A product passes through Process-I and Process-II. Materials issued to Process-1 amounted to ` 1,60,000. Wages ` 70,000 and Manufacturing Overheads ` 58,000 were charged to Process 1. Anticipated normal loss was 6% of input. 9,200 units of output were produced and transferred to Process-II. There was no opening stock. Input of raw material issued to Process-1 was 10,000 units. Scrap has a realizable value of ` 10 per unit. What is the value of units transferred to Process-II?
(A) ` 2,76,000
(B) ` 2,82,000
(C) ` 2,88,000
(D) ` 2,78,000
🔒 Get the worked solution + bare-Act citation for Process costing - Value of output transferred
Case Scenario - I
The following information pertains to ABC Limited for the period 1st April, 2024 to 31st March, 2025:
Sl. No. | Particulars | Amount (`) | Amount (`)
1 | Royalty paid for production | | 7,76,400
2 | Amount paid for power & fuel | | 2,15,200
3 | Packing cost paid for re-distribution of Finished Goods | | 70,500
4 | Repairs & Maintenance paid for: | | 1,45,000
| - Plant & Machinery | 65,000 |
| - Sales office building | 80,000 |
5 | Insurance premium paid for Plant & Machinery | | 1,17,520
6 | Research & Development cost paid for improvement in production process | | 17,800
7 | Depreciation on office building | | 75,500
8 | Salary paid to General Manager | | 15,50,000
9 | Salary & bonus paid to Sales & Marketing staff | | 11,40,500
10 | Receipt from sale of scrap and waste generated during production | | 20,000
11 | Value of Stock as on 1st April, 2024: | |
| - Raw materials | | 5,00,000
| - Work-in-process | | 8,40,000
| - Finished goods | | ?
12 | Value of stock as on 31st March, 2025: | |
| - Raw materials | | 1,10,000
| - Work-in-process | | 6,50,000
| - Finished goods | | ?
Other information are as follows:
(i) Raw materials purchased were 15,000 kgs @ ` 300 per kg.
(ii) Freight inwards paid at 4% of the cost of raw materials purchased.
(iii) Wages paid to factory workers was 30% of raw material consumed.
(iv) Closing stock of finished goods was ` 9,90,000 more than the opening stock. The average stock of finished goods was ` 11,55,000.
(v) Sales during the period 1st April, 2024 to 31st March, 2025 was ` 1,10,00,000.
What is the Prime cost?
(A) ` 78,88,000
(B) ` 65,91,600
(C) ` 75,82,600
(D) ` 72,92,000
🔒 Get the worked solution + bare-Act citation for Cost sheet - Prime cost
Case Scenario - I
The following information pertains to ABC Limited for the period 1st April, 2024 to 31st March, 2025:
Sl. No. | Particulars | Amount (`) | Amount (`)
1 | Royalty paid for production | | 7,76,400
2 | Amount paid for power & fuel | | 2,15,200
3 | Packing cost paid for re-distribution of Finished Goods | | 70,500
4 | Repairs & Maintenance paid for: | | 1,45,000
| - Plant & Machinery | 65,000 |
| - Sales office building | 80,000 |
5 | Insurance premium paid for Plant & Machinery | | 1,17,520
6 | Research & Development cost paid for improvement in production process | | 17,800
7 | Depreciation on office building | | 75,500
8 | Salary paid to General Manager | | 15,50,000
9 | Salary & bonus paid to Sales & Marketing staff | | 11,40,500
10 | Receipt from sale of scrap and waste generated during production | | 20,000
11 | Value of Stock as on 1st April, 2024: | |
| - Raw materials | | 5,00,000
| - Work-in-process | | 8,40,000
| - Finished goods | | ?
12 | Value of stock as on 31st March, 2025: | |
| - Raw materials | | 1,10,000
| - Work-in-process | | 6,50,000
| - Finished goods | | ?
Other information are as follows:
(i) Raw materials purchased were 15,000 kgs @ ` 300 per kg.
(ii) Freight inwards paid at 4% of the cost of raw materials purchased.
(iii) Wages paid to factory workers was 30% of raw material consumed.
(iv) Closing stock of finished goods was ` 9,90,000 more than the opening stock. The average stock of finished goods was ` 11,55,000.
(v) Sales during the period 1st April, 2024 to 31st March, 2025 was ` 1,10,00,000.
What is the Factory cost?
(A) ` 78,85,520
(B) ` 79,55,120
(C) ` 75,75,650
(D) ` 76,45,840
🔒 Get the worked solution + bare-Act citation for Cost sheet - Factory cost
Case Scenario - I
The following information pertains to ABC Limited for the period 1st April, 2024 to 31st March, 2025:
Sl. No. | Particulars | Amount (`) | Amount (`)
1 | Royalty paid for production | | 7,76,400
2 | Amount paid for power & fuel | | 2,15,200
3 | Packing cost paid for re-distribution of Finished Goods | | 70,500
4 | Repairs & Maintenance paid for: | | 1,45,000
| - Plant & Machinery | 65,000 |
| - Sales office building | 80,000 |
5 | Insurance premium paid for Plant & Machinery | | 1,17,520
6 | Research & Development cost paid for improvement in production process | | 17,800
7 | Depreciation on office building | | 75,500
8 | Salary paid to General Manager | | 15,50,000
9 | Salary & bonus paid to Sales & Marketing staff | | 11,40,500
10 | Receipt from sale of scrap and waste generated during production | | 20,000
11 | Value of Stock as on 1st April, 2024: | |
| - Raw materials | | 5,00,000
| - Work-in-process | | 8,40,000
| - Finished goods | | ?
12 | Value of stock as on 31st March, 2025: | |
| - Raw materials | | 1,10,000
| - Work-in-process | | 6,50,000
| - Finished goods | | ?
Other information are as follows:
(i) Raw materials purchased were 15,000 kgs @ ` 300 per kg.
(ii) Freight inwards paid at 4% of the cost of raw materials purchased.
(iii) Wages paid to factory workers was 30% of raw material consumed.
(iv) Closing stock of finished goods was ` 9,90,000 more than the opening stock. The average stock of finished goods was ` 11,55,000.
(v) Sales during the period 1st April, 2024 to 31st March, 2025 was ` 1,10,00,000.
What is the cost of goods sold?
(A) ` 76,55,520
(B) ` 78,35,850
(C) ` 69,62,920
(D) ` 70,82,500
🔒 Get the worked solution + bare-Act citation for Cost sheet - Cost of goods sold
Case Scenario - I
The following information pertains to ABC Limited for the period 1st April, 2024 to 31st March, 2025:
Sl. No. | Particulars | Amount (`) | Amount (`)
1 | Royalty paid for production | | 7,76,400
2 | Amount paid for power & fuel | | 2,15,200
3 | Packing cost paid for re-distribution of Finished Goods | | 70,500
4 | Repairs & Maintenance paid for: | | 1,45,000
| - Plant & Machinery | 65,000 |
| - Sales office building | 80,000 |
5 | Insurance premium paid for Plant & Machinery | | 1,17,520
6 | Research & Development cost paid for improvement in production process | | 17,800
7 | Depreciation on office building | | 75,500
8 | Salary paid to General Manager | | 15,50,000
9 | Salary & bonus paid to Sales & Marketing staff | | 11,40,500
10 | Receipt from sale of scrap and waste generated during production | | 20,000
11 | Value of Stock as on 1st April, 2024: | |
| - Raw materials | | 5,00,000
| - Work-in-process | | 8,40,000
| - Finished goods | | ?
12 | Value of stock as on 31st March, 2025: | |
| - Raw materials | | 1,10,000
| - Work-in-process | | 6,50,000
| - Finished goods | | ?
Other information are as follows:
(i) Raw materials purchased were 15,000 kgs @ ` 300 per kg.
(ii) Freight inwards paid at 4% of the cost of raw materials purchased.
(iii) Wages paid to factory workers was 30% of raw material consumed.
(iv) Closing stock of finished goods was ` 9,90,000 more than the opening stock. The average stock of finished goods was ` 11,55,000.
(v) Sales during the period 1st April, 2024 to 31st March, 2025 was ` 1,10,00,000.
What is the amount of Profit?
(A) ` 12,25,350
(B) ` 11,33,000
(C) ` 10,95,500
(D) ` 11,20,580
🔒 Get the worked solution + bare-Act citation for Cost sheet - Profit
Qmcq.6Absorption costing - Cost of production and Total cost⚡ Try this Q →
2 marksmedium
Case Scenario - II
JMS Limited, a soft drink company, is intending to introduce a new product viz. 'Herbs Infused Mineral Water' to the market. Annual sales of this new product is estimated at 36,000 units with a selling price of ` 75 per unit. The cost estimates for this new product are as follows:
Elements of Cost | Amount (`)
Direct material consumed | 9,50,000
Direct labour cost | 5,93,750
Manufacturing overheads (variable) | 2,85,000
Manufacturing overheads (fixed) | 1,90,000
General & Administration overheads (variable) | 1,42,500
General & Administration overheads (fixed) | 2,13,750
Selling and distribution overheads (variable) | 80,750
Selling and distribution overheads (fixed) | 64,250
There will be no closing stock of 'Herbs Infused Mineral Water'.
What is the 'Cost of production' and 'Total Cost' as per Absorption costing?
(A) ` 18,28,750 and ` 27,00,000
(B) ` 19,71,250 and ` 25,00,000
(C) ` 20,18,750 and ` 25,20,000
(D) ` 17,67,000 and ` 26,20,000
🔒 Get the worked solution + bare-Act citation for Absorption costing - Cost of production and Total cost
Qmcq.7Marginal costing - Total variable cost⚡ Try this Q →
2 marksmedium
Case Scenario - II
JMS Limited, a soft drink company, is intending to introduce a new product viz. 'Herbs Infused Mineral Water' to the market. Annual sales of this new product is estimated at 36,000 units with a selling price of ` 75 per unit. The cost estimates for this new product are as follows:
Elements of Cost | Amount (`)
Direct material consumed | 9,50,000
Direct labour cost | 5,93,750
Manufacturing overheads (variable) | 2,85,000
Manufacturing overheads (fixed) | 1,90,000
General & Administration overheads (variable) | 1,42,500
General & Administration overheads (fixed) | 2,13,750
Selling and distribution overheads (variable) | 80,750
Selling and distribution overheads (fixed) | 64,250
There will be no closing stock of 'Herbs Infused Mineral Water'.
What is the amount of total variable cost?
(A) ` 20,52,000
(B) ` 19,71,250
(C) ` 23,75,000
(D) ` 25,20,000
🔒 Get the worked solution + bare-Act citation for Marginal costing - Total variable cost
Case Scenario - II
JMS Limited, a soft drink company, is intending to introduce a new product viz. 'Herbs Infused Mineral Water' to the market. Annual sales of this new product is estimated at 36,000 units with a selling price of ` 75 per unit. The cost estimates for this new product are as follows:
Elements of Cost | Amount (`)
Direct material consumed | 9,50,000
Direct labour cost | 5,93,750
Manufacturing overheads (variable) | 2,85,000
Manufacturing overheads (fixed) | 1,90,000
General & Administration overheads (variable) | 1,42,500
General & Administration overheads (fixed) | 2,13,750
Selling and distribution overheads (variable) | 80,750
Selling and distribution overheads (fixed) | 64,250
There will be no closing stock of 'Herbs Infused Mineral Water'.
What is the Break-even Sales (in Rupees)?
(A) ` 32,50,000
(B) ` 23,69,000
(C) ` 16,33,000
(D) ` 19,50,000
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Q6.c-altMaterial control - Bill of materials⚡ Try this Q →
4 marksmedium
Discuss the uses of Bill of Material in the following departments:
(i) Marketing (Purchase) Department
(ii) Production Department
(iii) Stores Department
(iv) Cost/Accounting Department
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