CA Inter costing mock test papers Jan 2027: 5 formula traps
Good CA Inter costing mock test papers for January 2027 copy ICAI's Paper 4: 30 marks of numerical MCQs, then Q1 compulsory plus any four of Q2 to Q6, where Q1 to Q5 are numericals and Q6 is the only theory question. Write three of them before 29 December, and check each one for the five formula traps ICAI's examiners flagged in May 2026.
Costing marks are usually lost in a wrong base figure (a fixed cost, a split-off value, an absorbed overhead), and one wrong base spoils every figure after it. Below: how the paper is set, the traps to drill, one worked variance example checked against ICAI's answer, and a costing plan up to Group II, which starts on 8 January 2027 (ICAI, PDF (opens in a new tab)).
CA Inter costing mock test papers: how Paper 4 is set
A costing mock is useful only if it is set like ICAI's paper. This is how ICAI set May 2026, from its suggested answers for Paper 4 (PDF) (opens in a new tab):
| Part | What ICAI printed (May 2026) | What you write |
|---|---|---|
| Part I, 30 marks | 15 MCQs × 2 marks: two case scenarios of 5 MCQs each, plus 5 stand-alone MCQs. All 15 needed a calculation | All 15, on the OMR sheet. No negative marking |
| Q1, 14 marks | 5 + 5 + 4: batch costing, material and labour variances, reconciliation statement | Compulsory |
| Q2 to Q5, 14 marks each | Cost sheet, break-even, joint costs, fixed overhead variances, sales budget, labour turnover, ABC, marginal costing | Any four of Q2 to Q6 |
| Q6, 14 marks | 5 + 5 + 4 theory: JIT, cost control vs cost reduction, biometric attendance, with an OR on (c) |
ICAI prints 114 marks; you answer 100. The question paper itself says "Working notes should form part of the answer" (September 2026 Paper 4, PDF (opens in a new tab)). Costing, like every Inter paper, is a 3-hour afternoon sitting: 15 minutes to read from 1:45 PM, then writing from 2 PM to 5 PM.
ICAI's announcement gives only group dates: Group II on 8, 10 and 12 January 2027. If ICAI keeps the number order it used in September 2026, Paper 4 is on Friday 8 January; our CA Inter revision planner for Jan 2027 works on that basis. How all six Inter papers are set is in CA Inter exam pattern Jan 2027.
Which syllabus: for January 2027, ICAI's study material notice (PDF) (opens in a new tab) names the July 2024 Cost and Management Accounting modules (1 and 2), in their August 2025 or later reprint, together with ICAI's January 2027 RTP.
Numericals vs theory: CA Inter costing theory weightage
Theory in Paper 4 is one 14-mark question, Q6, and you can choose not to answer it. In each of the last three costing papers we read with answers, Q6 was 5 + 5 + 4 marks of theory with an OR on part (c):
| Attempt | Q6 theory (ICAI) |
|---|---|
| September 2025 | Responsibility centres; advantages of job costing; controlling employee cost OR uses of a bill of material (answers, PDF (opens in a new tab)) |
| January 2026 | Classifying expenses by function and variability; an incentive scheme; usefulness of ABC OR the components of budgetary control (answers, PDF (opens in a new tab)) |
| May 2026 | JIT (the "demand pull" system); cost control vs cost reduction; biometric attendance OR spoiled and defective work |
In May 2026, ICAI's examiners describe every part of Q1 to Q5 as "a numerical question". So at least 86 of the 100 marks you wrote were numerical, and all 100 could be. That changes how you use a mock:
- Decide Q6 in reading time. Compare Q6 with the numerical you like least among Q2 to Q5. If you know two of Q6's three parts well, Q6 is often the faster 14 marks: no working notes, no chain of figures.
- Don't rely on skipping theory. In May 2026 the examiners rated Q6(a) on JIT "Poor": "Most examinees failed to identify the correct inventory management system". A student who skipped theory had to get all four numericals right.
- Keep a one-page theory list of the topics above; Q6 draws on the same chapters as the numericals.
5 formula traps ICAI's examiners flagged in May 2026
Each of these traps is in ICAI's Group II examiners' comments for May 2026 (PDF) (opens in a new tab), and each one breaks a whole chain of figures. Read your mock copy for them first.
| # | Trap | What ICAI's examiners wrote | The line that saves it |
|---|---|---|---|
| 1 | Fixed cost hidden in a semi-variable cost (break-even, Q2(b)) | "Many examinees failed to compute the correct total fixed cost and cash fixed cost" (Below Average) | Separate the fixed part of every semi-variable cost; cash fixed cost = total fixed cost − depreciation |
| 2 | Sales value at split-off (joint costs, Q3(a)) | "failed to determine the correct sales value at the split-off point"; "inadequate understanding of the application of the incremental approach" (Below Average) | Split-off value = output at split-off × price at split-off. For further processing, compare only incremental revenue and incremental cost |
| 3 | Fixed overhead variances beyond expenditure (Q3(b)) | Most "correctly calculated only the Fixed Overhead Expenditure Variance" and struggled with volume, calendar and cost variances (Below Average), though the question "was adapted from the study material" | Work out the rate per unit and the rate per day first, then the absorbed overhead. The worked example below shows it |
| 4 | Cost of sales under ABC (Q5(a)) | Students found the cost drivers but "failed to calculate the correct cost of sales for both products" (Average) | Total each product's cost of sales in its own column before working out profit |
| 5 | Copying a figure wrong (batch costing, Q1(a)) | "some examinees copied the direct material cost incorrectly from the question paper" | Tick each given figure as you use it |
Trap 1 in ICAI's own numbers. In Q2(b), a semi-variable cost of 8,20,000 at 36,000 units had a variable part of 10 a unit. ICAI's answer takes the fixed part as 8,20,000 − 3,60,000 = 4,60,000, adds the other fixed cost of 5,90,000 to get a total fixed cost of 10,50,000 (break-even 21,000 units), and then takes away depreciation of 1,90,000 to get a cash fixed cost of 8,60,000 (cash break-even 17,200 units). A student who missed the 4,60,000 got every figure after it wrong.
The reconciliation statement in Q1(c) had a sixth, milder warning: some students "failed to incorporate the adjustments with the appropriate effect". Write "add" or "less" against every item, and give the reason for each.
What the examiners flagged in the other five Inter papers is in ICAI examiner comments for CA Inter May 2026.
Worked mini-example: fixed overhead variances, checked step by step
Use the same four formulas ICAI's May 2026 answer used, in this order. The numbers below are ours; the formulas are the ones in ICAI's answer to Q3(b).
| Budget | Actual | |
|---|---|---|
| Working days | 20 | 22 |
| Hours per day | 1,000 | 1,000 |
| Output per hour (units) | 2 | 1.9 |
| Output (units) | 40,000 | 41,800 |
| Fixed overhead (rupees) | 4,00,000 | 4,30,000 |
Step 1, the rates (working note). Standard fixed overhead per unit = 4,00,000 ÷ 40,000 = 10. Budgeted fixed overhead per day = 4,00,000 ÷ 20 = 20,000.
Step 2, absorbed overhead. Actual output × standard rate = 41,800 × 10 = 4,18,000.
Step 3, the variances (amounts in rupees).
| Variance | ICAI's formula | Working | Result |
|---|---|---|---|
| Expenditure | Budgeted fixed overhead − actual fixed overhead | 4,00,000 − 4,30,000 | 30,000 (A) |
| Volume | Absorbed overhead − budgeted overhead | 4,18,000 − 4,00,000 | 18,000 (F) |
| Calendar | (Actual days − budgeted days) × budgeted rate per day | (22 − 20) × 20,000 | 40,000 (F) |
| Cost | Absorbed overhead − actual fixed overhead | 4,18,000 − 4,30,000 | 12,000 (A) |
Step 4, check before you move on. Expenditure plus volume must equal the cost variance: 30,000 (A) + 18,000 (F) = 12,000 (A). It does. ICAI's own May 2026 figures pass the same check: 24,000 (A) + 30,000 (F) = 6,000 (F).
Step 5, read it. The two extra days were worth 40,000 (F), but the volume variance is only 18,000 (F). The gap is output per hour falling from 2 to 1.9: 2,200 fewer units × 10 = 22,000 (A).
Marks to protect: mark every variance (F) or (A), as ICAI's question asked, and keep the rate working as a numbered note. ICAI marks descriptive answers step by step (see step marking in CA exams), so a correct rate earns marks even if a later figure goes wrong.
Which chapters your CA Inter costing mocks must cover
No costing chapter is safe to leave out: in ICAI's last four papers, nine chapters each took 8 marks or more on average, so a costing mock should range over the whole syllabus. From our count of ICAI's September 2025 to September 2026 papers:
| Priority | Chapters |
|---|---|
| A (all four papers, 8+ marks a paper) | Marginal costing, cost sheet, overheads (absorption costing), budgets, material cost, employee cost, standard costing, service costing, activity based costing |
| B | Process costing, cost accounting systems and reconciliation, joint products and by-products, job costing, introduction |
| C | Unit and batch costing |
ICAI's section-wise weightage (PDF) (opens in a new tab) points the same way: standard costing, marginal costing and budgets together carry 25%–30%, and the cost-ascertainment section (material, employee cost, overheads, ABC and cost accounting systems) 35%–40%. The mark-by-mark table, attempt by attempt, is in our CA Inter chapter wise weightage for Jan 2027.
What this means for each mock: at least one variance question, one marginal costing or break-even question, one cost sheet or overhead question and one budget, and in Part I a case on a chapter you'd rather avoid. ICAI's two 10-mark MCQ cases have changed chapter every attempt.
Three CA Inter costing mocks before 8 January
Write costing three times, each mock at 2 PM in a full 3-hour sitting, and check each copy before the next.
| Mock | When | What it should tell you |
|---|---|---|
| Mock 1 | Second half of November | Which of the five traps you fall into, and whether 3 hours is enough |
| Mock 2 | First half of December | Whether the fixes from Mock 1 worked; MCQ cases under time |
| Mock 3 | 18 to 29 December, with Audit and FM-SM | The Group II sequence: Costing, then a day off, then the next paper |
How the costing mocks fit with your other five papers is in our CA Inter Jan 2027 mock test plan. For ICAI's own Mock Test Papers, see CA Inter MTP Jan 2027 schedule.
Build your costing formula sheet from your mocks
A useful costing formula sheet lists only what you got wrong. After each checked mock, add one line per lost step: the formula, the wrong base figure, the right one. By Mock 3 it is one page: your revision for the day before Paper 4.
Frequently asked questions
How much theory is there in CA Inter costing?
One 14-mark question, Q6 (5 + 5 + 4, with an OR on part (c)), in each of the September 2025, January 2026 and May 2026 papers. Q1 is compulsory and you answer any four of Q2 to Q6, so in May 2026, when Q1 to Q5 and all 15 MCQs were numerical, you could write all 100 marks as numericals.
Which are the most important questions in CA Inter costing for Jan 2027?
From ICAI's last four papers: marginal costing and break-even, cost sheets, overheads, budgets, material and employee cost, standard costing, service costing and ABC. Within them, practise the May 2026 weak spots: cash fixed cost, joint costs at split-off and fixed overhead variances. The full type-by-type list from ICAI's last four papers is in CA Inter costing important questions.
Is CA Inter costing tough?
The concepts are manageable; the paper is long and every chain of figures depends on its first figure. ICAI's examiners rated three May 2026 questions "Below Average", one of them a question adapted from the study material. Timed practice with your copy checked fixes this faster than re-reading.
Are ICAI's costing MTPs enough as mock tests?
They are the best free practice; we link them on our CA Inter free resources page. You check them yourself.
CA Inter costing test series for January 2027
For the three timed sittings above, use our CA Inter Costing test series: 3 full-syllabus Paper 4 mocks, each a 3-hour paper at the level of ICAI's own and on its latest pattern, testing every amendment that applies for January 2027. Write the paper by hand, scan the pages into a single PDF and upload it; each paper allows one checked submission. Where a step loses marks, the checked copy says why and shows the line that earns them, which is exactly what your formula sheet needs. Mock 1's preview pages are open on the costing page, so you can see how the paper is set first. Writing all of Group II? See the CA Inter Group II mock tests, or every level of our CA test series and CA mock tests.