Practice Test GeeksAAT Level 4 Practice Test
← All AAT L4 Flashcard Decks

Applied Management Accounting Flashcards

6 cards from real AAT L4 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Applied Management Accounting flashcards as text

  1. A company uses activity-based costing. The cost driver for 'machine setups' is number of setups. Total setup costs are £48,000 and there are 160 setups in the period. Product A requires 40 setups. What is the setup cost allocated to Product A?

    Answer: £12,000

    The cost per setup is £48,000 ÷ 160 = £300. Product A uses 40 setups, so its allocation is 40 × £300 = £12,000.

  2. A business has fixed costs of £120,000 and a contribution to sales ratio (C/S ratio) of 40%. What is the breakeven sales revenue?

    Answer: £300,000

    Breakeven sales revenue = Fixed costs ÷ C/S ratio = £120,000 ÷ 0.40 = £300,000.

  3. Using a standard costing system, actual material used was 5,200 kg at £4.80 per kg. The standard was 5,000 kg at £5.00 per kg for actual production. What is the material usage variance?

    Answer: £1,000 Adverse

    Material usage variance = (Standard quantity − Actual quantity) × Standard price = (5,000 − 5,200) × £5.00 = −£1,000, i.e. £1,000 Adverse.

  4. A limiting factor analysis shows that Product X contributes £18 per unit and requires 3 machine hours, while Product Y contributes £20 per unit and requires 5 machine hours. Machine hours are the binding constraint. Which product should be prioritised?

    Answer: Product X, as it has higher contribution per machine hour

    Product X: £18 ÷ 3 hours = £6/hour. Product Y: £20 ÷ 5 hours = £4/hour. Product X generates more contribution per scarce resource hour, so it should be prioritised.

  5. A company operates a JIT (Just-in-Time) production system. Which of the following is a key characteristic of JIT?

    Answer: Producing goods only when required by the customer

    JIT systems produce goods only in response to actual demand, eliminating the need to hold inventories and reducing waste across the production process.

  6. The balanced scorecard includes four perspectives. Which perspective focuses on measures such as cycle time, defect rates, and process efficiency?

    Answer: Internal business process perspective

    The internal business process perspective focuses on the efficiency and effectiveness of internal operations, including production cycle times, defect rates, and process improvements.