AAT Level 3 Management Accounting Techniques (MATS) Practice Test

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