AAT L2 Elements of Costing

Question 1

Which of the following is classified as a direct cost?

Accepted Answer

Raw materials used in production

Answer

Factory rent

Answer

Office stationery

Answer

Salary of the managing director

Question 2

The formula for calculating total cost is:

Accepted Answer

All of the above are correct

Answer

Direct costs + Indirect costs

Answer

Fixed costs + Variable costs

Answer

Direct materials + Direct labour + Overheads

Question 3

A variable cost is one that:

Accepted Answer

Changes in total in direct proportion to the level of activity

Answer

Stays the same in total regardless of output

Answer

Changes per unit as output changes

Answer

Is always a direct cost

Question 4

Factory supervisors' salaries are classified as:

Accepted Answer

Production overheads (indirect costs)

Answer

Direct labour costs

Answer

Administrative overheads

Answer

Selling and distribution costs

Question 5

A semi-variable cost:

Accepted Answer

Has both a fixed element and a variable element

Answer

Is always fixed

Answer

Only changes when output exceeds a certain level

Answer

Is the same as a stepped cost

Question 6

Which of the following is an example of a fixed cost?

Accepted Answer

Annual insurance premium for the factory

Answer

Direct materials

Answer

Sales commission per unit sold

Answer

Packaging materials