Everything you need to know while preparing for CA Intermediate Paper 3: Cost and Management Accounting

In this article, we are sharing the tips & tricks on Preparing for CA Intermediate Paper 3: Cost and Management Accounting.

What is the structure of the paper?

The Cost and Management Accounting (CMA) paper of CA Intermediate is almost entirely practical. You are required to attempt 5 out of 6 questions of 20 marks each.

Multiple choice questions of 1 or 2 marks each (both standalone and case study based) aggregating a total of 30 marks are asked. The break-up of the remaining 70 marks of descriptive type questions is as under:

    1. Generally, the first question, which is to be compulsorily attempted, consists of 4 questions of 5 marks each.
    2. Question No. 2 to 5 usually comprises 2 questions of 10 marks each which are elaborate practical questions.
    3. Question No. 6 once again includes a break up of 4 questions of 5 marks each, containing theoretical questions about the practical chapters.

Please Note: This is the trend that has been observed over the years. However, ICAI may change its paper pattern and question break-up any time.

What are the examiner’s expectations?

    1. Emphasis is laid on correct application of the formula and related concepts to arrive at a definite answer or conclusion.
    2. Presentation of the answers (appropriate formats and working notes) will be given importance.
    3. The assumptions made are reasonable and in line with ICAI.

What should be the source of content?

        1. Content provided by your Coaching Provider along with your personal summary notes can be used as a base. However, ensure that it is comprehensive in its coverage by cross checking it with ICAI material
        2. Past Examination Papers, RTPs and MTPs.
        3. Referencer developed by ICAI for a summarised version of the notes.

Pro Tip: Stick to your base material as a reference. You must avoid changing the source of content closer to examination since that may lead to confusion in your study preparation.

What is the ideal learning methodology & time to be invested?

ReadingSourceTimeExpected Outcome
1stA detailed study of every concept involved6 to 7 days● Try solving as many questions as possible.

● Eliminate the easy questions and prepare a repository of questions.

● Highlight the important and tricky adjustments so that you can just go through them whenever you revise instead of practicing the entire solution.

● Make a quick reference list of the important points you must remember about every chapter.

● Prepare summarised notes for the theoretical aspects of the chapters. If time permits, solve the MCQs in the ICAI module for conceptual clarity.

2ndA summarised version of the syllabus3 to 4 days● Cut down the list of questions to be practised in this revision.

● Keep reading the notes you have prepared for the theory component.

3rdA quick revision to cut-down pre-exam study time1 to 1.5 day● Keep practising, go through all your summarised notes, and appear for a mock exam.
4thThe final revision one-day before the exam1 to 1.5 day● Trust your past preparations and instincts.

● Go through all earmarked sums and theory.

What is the appropriate order in which the syllabus should be studied?

Priority 1Priority 2
Standard CostingCost Accounting System
Marginal CostingUnit & Batch Costing
Material CostJob Costing
Employee CostJoint Products and By-products
Activity based CostingOverheads: Absorption Costing Method
Cost SheetIntroduction to Cost and Management Accounting
Budget and Budgetary Control
Process & Operation Costing
Service Costing
Contract Costing

Note: Learn about the weightage distribution over various topics as per ICAI

Some trends and observations from the past year examination papers are as under:

Names of ChaptersType and Weightage of Questions asked
1. Cost Sheet

2. Contract Costing

3. Activity based Costing

4. Process Costing

5. Service Costing

6. Budgets and Budgetary Control

10 mark practical questions from each
1. Material Costing

2. Employee Costing

3. Marginal Costing

4. Standard Costing

Either 5 or 10 mark questions are asked, sometimes both
1. Cost Accounting System – Reconciliation Account

2. Unit, Batch, Job Costing

3. Joint and By Products

4. Theory

5 mark questions

Disclaimer: The above analysis is based on examination papers of the last 3-4 years. The trend may change from time to time at discretion of ICAI

How can I ace my exam writing skills?

Accounting papers are known to be lengthy – The best way through it is to know a rough format of your answers in advance by practicing a few answers of each chapter in writing.

      1. Use the 15 minutes reading time judiciously to strategize your way through the paper.
      2. It is very important to choose the right order for attempting the paper – ensure that you manage to attempt 40 marks in the first 1-1.25 hours.
      3. In case you cannot figure out the solution to a particular question within a designated time, make sure you move ahead to the next question.
      4. Ensure that all formats are properly made with headings and unit of account symbol clearly written.

Pro Tip: Start writing your exam with the question you are most comfortable with – it will help to boost your confidence for the paper.

How to prepare on the eve of the exam?

It is possible to revise the entire syllabus provided you have prepared summary notes and have a thorough grip on the content.

Below is an illustrative list on how topics should be allocated between the three days you will have. You should prepare your own list based on the syllabus coverage and instructions by your coaching provider.

On day of Costing PaperOn Break dayOn day of Exam
· Go through the theory of all chapters from notes prepared by you.

· Unit, Batch, Job Costing

· Contract Costing

· Cost Accounting System

· Joint and By Products

· Material Costing

· Employee Costing

· Marginal Costing

· Standard Costing

· Service Costing

· Process Costing

· Activity based Costing

· Cost Sheet

· Overheads

· Budgets

· Go through the quick reference list of the important points you must remember about every chapter.

· Read earmarked sums and adjustments.

What are the major challenges faced by students while attempting the Exam on the D Day & how must I prepare in advance to meet those challenges?

Inability to logically think and present an answer to a new question● Solve a couple of questions in writing in every revision.

● Focus on the format of the various answers as per ICAI.

● Know when to elaborate through working notes to improve understand-ability.

Recollecting and associating questions to the related topicsAppear for mock exams in a time bound format so that you can get an idea of how to deal with all the topics together.
Scoring well in the theory based questionsUse the right vocabulary – stick to the keywords used by ICAI.
Inability to manage time in the paperUnnecessary time should not be devoted on a particular question. In case you cannot figure out the solution to a particular question, designate some time to it at the end of the paper.

For additional resources to assist you while preparing for CA Intermediate,visit here.

Good Luck!

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