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CMA Inter — free MCQ practice

Choose from 80 questions across 2 subjects and 6 topics. Open any question for its answer and worked solution, or keep learning through bite-sized lessons and reviews with Quill.

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CMA Inter subjects

Cost and Management Accounting (58)Direct Taxation (22)

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SalariesCost SheetMarginal CostingStandard CostingBudgets and Budgetary ControlProcess Costing

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Prime cost is the total of which three elements?Read the answer and worked solution →Opening stock of material is 40,000, purchases are 2,10,000 and closing stock is 30,000. Material consumed isRead the answer and worked solution →Cost of goods sold is arrived at by adjusting cost of production forRead the answer and worked solution →Cost of production is 8,00,000, opening finished goods 60,000 and closing finished goods 90,000. Cost of goods sold isRead the answer and worked solution →

Worked practice questions

Prime cost is the total of which three elements?

  1. Direct material, direct labour and direct expenses
  2. Direct material, factory rent and admin salary
  3. Direct labour, selling cost and distribution cost
  4. Direct expenses, packing cost and works overhead
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Correct answer: A. Direct material, direct labour and direct expenses

1. Prime cost collects only the directly attributable elements of cost. 2. Those are direct material cost, direct employee (labour) cost and direct expenses. 3. The total of each element is worked out separately and then added. 4. Overheads of any kind sit outside prime cost, so factory rent and admin salary do not belong. _Source: ICAI Cost and Management Accounting Ch6 'Cost Sheet', section 6.3.1_

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Opening stock of material is 40,000, purchases are 2,10,000 and closing stock is 30,000. Material consumed is

  1. 2,50,000
  2. 2,20,000
  3. 2,80,000
  4. 1,80,000
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Correct answer: B. 2,20,000

1. Direct materials consumed = opening stock plus purchases less closing stock. 2. Opening plus purchases = 40,000 + 2,10,000 = 2,50,000. 3. Deduct closing stock: 2,50,000 - 30,000 = 2,20,000. 4. Adding closing stock instead of deducting gives 2,80,000, which is the usual slip. _Source: ICAI Cost and Management Accounting Ch6 'Cost Sheet', section 6.3.1(i)_

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Cost of goods sold is arrived at by adjusting cost of production for

  1. opening and closing stock of raw material
  2. opening and closing work in progress only
  3. opening and closing stock of finished goods
  4. selling and distribution overheads only
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Correct answer: C. opening and closing stock of finished goods

1. Cost of production covers everything up to goods being ready for sale. 2. Goods sold in a period are not the same as goods produced in it. 3. So cost of production is adjusted by adding opening finished goods stock and deducting closing finished goods stock. 4. Raw material stock is already handled earlier, inside direct material consumed. _Source: ICAI Cost and Management Accounting Ch6 'Cost Sheet', section 6.3.3_

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  1. Choose a CMA Inter question and try to work out your answer.
  2. Open the question to check the correct answer and read its worked solution.
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