AAT Level 3 Management Accounting Techniques (MATS) Practice Test

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• Which costing method includes fixed production overheads in inventory valuation?
• Required contribution per unit is calculated as
• Marginal costing is primarily focused on which aspect of costs for decision making?
• Which statement best describes rolling budgets?
• In marginal costing, are fixed overheads included in product cost?
• PV ratio when contribution per unit is 7 and selling price per unit is 10 is
• Cost classification by nature classifies costs according to their relation to cost units as which pair?
• Total cost refers to?
• In short-term decision making, which costs are relevant?
• In the reorder level calculation, the extra stock kept to prevent stockouts is called:
• Which of the following is a disadvantage of ABC?
• Which statement is false about overhead absorption using the budgeted overhead rate method?
• Which costing method is used in businesses that produce batches of identical units, but each batch consists of different units?
• Which statement best describes CVP assumptions about selling price?
• Which of the following is a variance type commonly analyzed within standard costing?
• The purpose of overhead absorption is to:
• Which statement best describes unit cost as activity increases?
• Which costing method is less reliant on accurate forecasting of production volumes?
• What is a disadvantage of AVCO?
• Which of the following is a direct expense?
• Which of the following are indirect expenses?
• In ABC, after grouping overheads into cost pools and identifying cost drivers, which step comes next?
• Under absorption costing, fixed production costs are included in inventory as part of product costs.
• Total production is equal to which of the following?
• Periodic review inventory control means replenishment orders are placed at what times?
• OAR is defined as which of the following?
• Working capital cycle: If inventory days are 60, receivable days are 45, and payable days are 30, what is the cycle in days?
• What is the overtime premium?
• In marginal costing all fixed costs are
• What is an advantage of FIFO?
• Which formula converts profit to cash?
• Double entry to account for materials used in labour?
• Margin of safety in units is calculated as budgeted sales units minus breakeven sales units. If budgeted sales are 15,000 and breakeven sales are 5,000, what is the MOS in units?
• Overtime hours are a direct cost only if they are working towards a specific customer request. Which of the following statements is correct?
• Indirect expenses can be identified with a specific cost unit.
• What is Prime Cost?
• What is the margin of safety percentage when budgeted sales are 15,000 and breakeven sales are 5,000?
• What is the correct double entry for indirect labour?
• Which statement about overhead absorption is NOT true?
• Under marginal costing, how is inventory valued per unit?
• Which cost is considered part of prime cost?
• Which formula correctly gives the trade payable payment period (in days)?
• Economic Order Quantity (EOQ) is given by:
• Absorption costing uses which approach to determine product cost?
• Under AVCO, which price is used to value both inventory and cost of goods sold?
• Under-absorption of overhead will be shown on which side of the SPL?
• Absorption cost is defined as:
• Cost classification by element entails:
• What is the marginal cost?
• Re-order level is calculated as:
• Under absorption costing, how is inventory valuation different from marginal costing?
• In absorption costing gross profit equals
• Which approach would you use if you want to calculate the cost per unit excluding fixed overheads for decision making?
• In production accounting, wastage is best described as which of the following?
• What do management accountants turn data into?
• Overtime premium refers to?
• Absorption costing splits costs based on which criterion?
• If an overhead is allocated to a service cost centre, it is re-apportioned to other centres. True or false?
• If fixed costs are 60,000; required profit 15,000; and contribution per unit is 5, what is the required sales volume?
• Which entry records the receipt of material purchases from suppliers?
• How are variable non-production overheads treated in marginal costing?
• Under FIFO, which prices are used to value ending inventory?
• What is the double entry to record wages paid?
• Which statement is true about contribution?
• What is the primary purpose of inventory control?
• What is the Overhead Absorption Ratio (OAR) formula?
• In ABC, which description best defines a cost pool?
• Which inventory valuation method provides higher profits when prices are rising?
• Which of the following is an indirect expense?
• Increase in contribution equals
• Which of the following is the correct description of maximum inventory level?
• Which expression represents the sales value needed to achieve a given profit?
• What is the relationship between variable cost per unit and total variable cost as activity level changes?
• What is adverse variance?
• Break-even point in sales value is calculated as
• Maximum re-order quantity is equal to:
• Batch costing is not a form of specific order costing.
• What is a disadvantage of FIFO?
• Buffer inventory is defined as which of the following?
• Profit formula: Which statement is correct?
• Which statement correctly describes material usage?
• Which formula correctly calculates the trade receivables collection period (in days)?
• Cost classification by function divides costs into which two categories?
• Which description best describes marginal costing usage in CVP analysis?
• Double entry for materials write offs?
• What does a cash budget provide for management?
• Production overheads are included in the total cost of a product. True or false?
• Apportionment of overheads means that when an overhead relates to more than one production centre it is spread across the applicable centres. True or false?
• Which of the following is a key advantage of absorption costing?
• Which sequence correctly describes steps for ABC overhead recovery?
• Where are rolling budgets particularly beneficial?
• Which of the following is a purpose of a cash budget?
• What is a cost unit?
• What is the purpose of a cost centre?
• Break-even point in sales value given fixed costs of 60,000 and a PV ratio of 0.50 is
• Which statement about ABC disadvantages is true?
• Are fixed production overheads included in inventory under marginal costing?
• What is the main purpose of marginal costing?
• Which statement about marginal cost is true?
• What are the different remuneration systems?
• COS stands for which term?
• What is a flexed budget?
• Service costing is a form of specific order costing.
• Expense is defined as?
• Which statement about expenses is true?
• Which inventory valuation method provides higher profits when prices are falling?
• Which cost is included in absorption costing but not in prime cost?
• Which statement about overhead absorption is true?
• In marginal costing inventory is valued at
• In batch costing, which statement describes a batch?
• Breakeven point in units can be calculated as
• Which statement about cash and profit is correct?
• Which sequence best describes how overheads are accounted for?
• What is an advantage of AVCO?
• Fixed costs in CVP are which of the following?
• What is prime cost?
• Which statement best describes apportionment of overheads?
• Which method is used to deduce the fixed and variable aspects of a semi-fixed cost?
• Double entry for indirect materials?
• What best describes a cost driver in ABC?
• What is the double entry to record indirect labour?
• Rolling budgets are defined as
• Which of the following is NOT an attribute of good information?
• In ABC, what is a cost pool?
• In overhead absorption, which sequence is correct?
• Which of the following are direct expenses?
• What is the double entry to record direct labour?
• Which formula gives the sales volume required to achieve a specified profit?
• Which statement about EOQ is true?
• Total cost is defined as?
• Absorption cost is defined as?
• What are the 2 types of inventory control system?
• In CVP, fixed costs are which of the following?
• Which set describes the three types of expense?
• What is a cost centre?
• Which of the following is a labour-related variance?
• Minimum re-order quantity is equal to:
• Which type of expense includes production rent?
• Double entry to account for materials used in production?
• Which of the following is NOT a cost element?
• Which formula gives the variable cost per unit?
• Over-absorption of overhead will be shown on which side of the SPL?
• Which of the following is an advantage of ABC?
• Allocation of overheads means the overhead relates to one production centre and is wholly attributed to that centre. True or false?
• Total variable costs equal what expression?
• Maximum inventory level equals which of the following?
• Which statement best describes marginal cost?
• Which costing method is used when goods or services are produced by continuous operations?
• Which expression correctly represents the working capital cycle?
• Marginal costing splits costs based on
• Which is a secondary purpose of management accounting?
• Under marginal costing, which costs are treated as period costs rather than inventory costs?
• Under marginal costing, what is used to value each unit of inventory?
• Inventory holding period formula?
• Which term describes the costing system used for work ordered by customers?
• What is Marginal cost?
• Indirect materials are recorded in double-entry as which of the following?
• Fixed overhead variances relate to
• Contribution per unit equals
• Fixed budget is defined as
• If trade receivables are 180,000 and annual revenue is 2,700,000, what is the collection period in days?
• In CVP, which factor is the sole driver of cost changes?
• Which costing system is used when the work done consists of identifiable jobs or batches?
• Inventory holding period: If inventories are 250,000 and COS is 1,000,000, what is the holding period in days?
• Which entry would record the transfer of materials to production (WIP)?
• Margin of safety in revenue equals MOS in units multiplied by the selling price per unit. If MOS in units is 2,000 and the selling price per unit is 25, what is MOS in revenue?
• Material purchases are defined as which formula?
• Which describes inventory control?
• If original contribution is 1,500 and required contribution is 2,100, by how much does the contribution need to increase?
• P/V ratio (definition) is
• Which costing method is used when production is made up of individual jobs, each job is different and identified separately as a cost unit?
• What is working capital?
• Standard cost is defined as
• Which statement about prime cost is true?
• Liquidity is defined as
• Which costing method is used when goods or services are produced as a direct result of a sequence of continuous operations?
• Which item is included as a cash inflow in a cash budget?
• Breakeven point in units: If fixed costs are 60,000 and contribution per unit is 12, how many units are required to breakeven?
• Compared with FIFO, AVCO generally:
• Breakeven revenue calculation: If fixed costs are 40,000, contribution per unit is 8, and selling price per unit is 20, what is the breakeven revenue?
• Material usage is calculated as which of the following?
• CVP stands for?
• Contribution is defined as what?
• Which condition describes when a favourable variance occurs?
• Cost remains constant at all activity levels for which type of costs?
• In absorption costing inventory is valued at what?
• What is Service costing?
• What is the correct double entry for opening balance of materials?
• Which option demonstrates the all-variable-costs concept used for contribution in marginal costing?
• Sales value giving a profit is calculated as
• Working capital cycle formula?
• Assumptions of CVP: Which is true?
• In absorption costing fixed production costs are