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100+ Free CMA Inter Paper 8: Cost Accounting Practice Questions

ICMAI CMA Intermediate Paper 8: Cost Accounting (CA) practice questions are available now; exam metadata is being verified.

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CAS-6 issued by the ICMAI Cost Accounting Standards Board deals with:

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2026 Statistics

Key Facts: CMA Inter Paper 8: Cost Accounting Exam

100

Marks in the Paper

ICMAI Syllabus 2022

3 hrs

Exam Duration

ICMAI Syllabus 2022

40%

Minimum Paper Pass Mark

ICMAI Examination Rules

CAS 1-24

Cost Accounting Standards

ICMAI CASB

Group I

Intermediate Group

ICMAI Syllabus 2022

ICMAI CMA Intermediate Paper 8: Cost Accounting (CA) is a 100-mark, 3-hour Group I paper under Syllabus 2022. The syllabus runs from cost-accounting fundamentals and cost ascertainment of material (CAS-6), employee (CAS-7) and overhead costs, through the Cost Accounting Standards (CAS-1 to CAS-24) and cost book-keeping, into methods of costing (job, batch, contract, process, operating) and cost accounting techniques (marginal costing, with standard costing and budgeting). The exam is descriptive/objective written rather than a pure MCQ test; passing requires 40% in the paper and 50% aggregate in the group. This free prep set offers 100 MCQs mapped to those domains.

Sample CMA Inter Paper 8: Cost Accounting Practice Questions

Try these sample questions to test your CMA Inter Paper 8: Cost Accounting exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1In cost accounting, the aggregate of direct material cost, direct labour cost and direct expenses is known as:
A.Prime cost
B.Works cost
C.Cost of production
D.Cost of sales
Explanation: Prime cost is the sum of all direct costs: direct materials + direct labour + direct (chargeable) expenses. It is the first element built up in a cost sheet before factory overheads are added.
2Which of the following is the PRIMARY objective of cost accounting?
A.To prepare statutory financial statements for shareholders
B.To compute income tax liability
C.To value goodwill on amalgamation
D.To ascertain cost and aid cost control and decision-making
Explanation: Cost accounting exists to ascertain the cost of products/services, control costs, and provide data for managerial decision-making, pricing, and planning. Financial reporting is the realm of financial accounting.
3A cost that does not change in total within a relevant range of activity, but changes per unit as output changes, is a:
A.Variable cost
B.Semi-variable cost
C.Step cost
D.Fixed cost
Explanation: A fixed cost stays constant in total over the relevant range (e.g., factory rent), so the cost per unit falls as output rises and rises as output falls. Variable cost behaves the opposite way.
4Which statement correctly distinguishes cost accounting from financial accounting?
A.Cost accounting is mandatory for all companies; financial accounting is optional
B.Cost accounting records only cash transactions
C.Financial accounting classifies cost by element, function and behaviour
D.Cost accounting reports primarily to internal management; financial accounting reports primarily to external stakeholders
Explanation: Financial accounting produces general-purpose statements for external users (investors, creditors, regulators), while cost accounting generates detailed cost data mainly for internal management to control costs and make decisions.
5A cost incurred in the past that cannot be changed by any future decision is termed a:
A.Sunk cost
B.Opportunity cost
C.Imputed cost
D.Replacement cost
Explanation: A sunk cost is an already-incurred, unrecoverable cost; because it is irrelevant to future choices, it should be ignored in decision-making. Opportunity and imputed costs are relevant for decisions.
6Classifying costs as production, administration, selling and distribution is a classification by:
A.Element
B.Behaviour
C.Function
D.Controllability
Explanation: Functional classification groups costs by the business function they relate to: production, administration, selling, and distribution. This drives the build-up in a cost sheet.
7A responsibility centre whose manager is accountable for both costs and revenues but NOT for investment is a:
A.Cost centre
B.Investment centre
C.Revenue centre
D.Profit centre
Explanation: A profit centre is responsible for revenues and the costs of generating them, so its performance is judged by profit. An investment centre additionally controls capital invested.
8Which of the following is NOT an element of cost?
A.Material
B.Labour
C.Expenses
D.Profit
Explanation: The three elements of cost are material, labour and expenses; each can be direct or indirect. Profit is the surplus of sales over total cost and is not itself an element of cost.
9A cost unit is best described as:
A.A location where costs are collected
B.A person responsible for cost control
C.A document recording cost transactions
D.A unit of product or service in terms of which cost is ascertained
Explanation: A cost unit is a quantitative unit of product or service (e.g., per tonne, per litre, per passenger-km) to which costs are related for ascertainment. A cost centre, by contrast, is a location or function.
10Conversion cost is defined as:
A.Direct material + direct labour
B.Prime cost + administration overhead
C.Direct material + factory overhead
D.Direct labour + factory overhead
Explanation: Conversion cost is the cost of converting raw material into finished goods, i.e., direct labour plus factory (manufacturing) overheads. It excludes direct material.

About the CMA Inter Paper 8: Cost Accounting Practice Questions

Verified exam format metadata for ICMAI CMA Intermediate Paper 8: Cost Accounting (CA) is pending. The practice questions above remain available while official exam length, timing, passing score, fee, and administrator details are reviewed.