AAT L3 Management Accounting (Costing) 3

Question 1

The purpose of job costing is to:

Accepted Answer

Calculate the cost of a specific, individual job or batch

Answer

Average costs across all products produced

Answer

Measure the cost of continuous production

Answer

Track overheads at departmental level only

Question 2

Process costing is most appropriate for which type of production?

Accepted Answer

Continuous or mass production of a homogeneous product

Answer

One-off bespoke customer orders

Answer

Batch production with individual pricing

Answer

Service businesses with variable inputs

Question 3

Normal loss in process costing refers to:

Accepted Answer

The expected level of waste or loss that is anticipated in the production process

Answer

Output that fails quality inspection

Answer

Abnormal inefficiency in production

Answer

Lost units due to machine breakdown

Question 4

Which of the following describes semi-variable costs?

Accepted Answer

Costs that have both a fixed element and a variable element

Answer

Costs that are always variable in nature

Answer

Costs that change in steps at capacity thresholds

Answer

Costs that are fixed per unit of output

Question 5

The high-low method is used to:

Accepted Answer

Separate fixed and variable elements of a semi-variable cost

Answer

Calculate the average cost per unit

Answer

Calculate the maximum profit from a given output

Answer

Determine the reorder level for inventory

Question 6

Which of the following is an indirect cost (overhead)?

Accepted Answer

Depreciation of factory machinery

Answer

Direct labour on a specific product

Answer

Raw material for a specific job

Answer

Commission for a specific sale