AAT Level 2 Basic Costing Assignment 1
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Before attempting this assignment you should have read chapters 1 and 2 of your Osborne Book ”BASIC COSTING" and attempted the chapter activities in your WORKBOOK. The pass mark for the assignment is 70% - should you fail then please review the areas where you are weak. If you are still having problems then please do not hesitate to contact AATFree Good Luck!
- 1.Intel Corporation makes computer chips. Intel Corporation would be classified as a:
- A.
Manufacturing company
- B.
Merchandising company
- C.
Service company
- D.
Simple company
- 2.A product support hot line would be considered:
- A.
Customer service
- B.
Distribution
- C.
Production or purchases
- D.
Marketing
- 3.Raw materials, work in process and finished goods are the three types of inventory held by which of the following types of companies?
- A.
Manufacturing
- B.
Retailers
- C.
Wholesalers
- D.
Service Companies
- 4.What type of company resells products it previously purchased ready-made from suppliers?
- A.
Merchandise
- B.
Retailer
- C.
Wholesaler
- D.
All of the above
- 5.Which types of company typically produces it's own inventory?
- A.
Manufacturer
- B.
Service company
- C.
Retailer
- D.
Wholesaler
- 6.How would Honda classify its partially completed vehicles?
- A.
Finished goods
- B.
Raw materials
- C.
Supplies
- D.
Work in process
- 7.Before these materials are used to manufacture its cars, Honda classifies steel, glass, and plastic as:
- A.
Finished goods inventory
- B.
Raw materials inventory
- C.
Work in process inventory
- D.
Merchandise inventory
- 8.Which of the following items would NOT be found in raw materials inventory for a furniture manufacturer?
- A.
Wood
- B.
Fabric
- C.
Assembly worker wages
- D.
Steel framing
- 9.Delivery expenses are are charged to which of the following areas?
- A.
Customer service
- B.
Distribution
- C.
Production or purchases
- D.
Marketing
- 10.Indirect costs incurred in manufacturing motor vehicles include all of the following EXCEPT:
- A.
Cost of the engines
- B.
Machinery depreciation in the factory
- C.
Plant cleaners wages
- D.
Plant supervisor salary
- 11.Which of the following is an example of direct labor?
- A.
Salary of a production manager
- B.
Salary of the director of operations
- C.
Wages of assembly line personnel
- D.
Wages of factory security
- 12.Which of the following are classifed as manufacturing overhead?
- A.
Direct materials and direct labor
- B.
Indirect labor and indirect materials
- C.
All materials
- D.
Factory rent and direct labor
- 13.Certain materials used in a manufacturing plant cannot be traced to a specific unit. These materials are called _________ materials.
- A.
General
- B.
Direct
- C.
Finished
- D.
Indirect
- 14.Which of the following is an example of a fixed cost for a manufacturer?
- A.
Salary of the plant manager
- B.
Sales commissions
- C.
Direct materials
- D.
Delivery costs
- 15.Which of the following describes the way in which total fixed costs behave?
- A.
They will remain the same throughout production levels.
- B.
They will decrease as production decreases.
- C.
They will decrease as production increases.
- D.
They will increase as production decreases
- 16.Varible costs:
- A.
Are fixed in total as production levels change
- B.
Are fixed per unit and vary in total as productions levels change.
- C.
Decrease per unit as production volume increases
- D.
Vary per unit of output as production levels change
- 17.A company's total costs are calculated by:
- A.
Subtracting total fixed costs from total variable costs
- B.
Subtracting total variable costs from total fixed costs
- C.
Adding total fixed costs to total variable costs
- D.
Subtracting total fixed costs and total variable costs from sales.
- 18.Budgets are the way that managers can express their:
- A.
Plans
- B.
Decision making
- C.
Control
- D.
Hiring practices
- 19.Management accounting focuses on:
- A.
External reporting
- B.
Internal reporting
- C.
Tax preparation
- D.
Auditing
- 20.Which of the following types of information are used in managerial accounting?
- A.
Financial information
- B.
Nonfinancial information
- C.
Forecasts of future earnings
- D.
All of the above
- 21.
- A.
Shareholders
- B.
Creditors
- C.
Internal decision-makers
- D.
Both shareholders and creditors
- 22.Which of the following groups are external users of financial information?
- A.
Customers of the company
- B.
Vendors of the company
- C.
Potential investors of the company
- D.
All of the above
- 23.Which of the following are the internal decision-makers of a company?
- A.
Vendors
- B.
Customers
- C.
Managers
- D.
Shareholders
- 24.Which of the following groups are most likely to use a company's budget information?
- A.
Managers
- B.
Customers
- C.
Creditors
- D.
Suppliers
- 25.Owners of a limited company are its:
- A.
Creditors
- B.
Customers
- C.
Managers
- D.
Shareholders
- 26.Information for external parties about past performance is provided by:
- A.
Budget reports
- B.
Financial accounting reports
- C.
Managerial accounting reports
- D.
Planning reports
- 27.Information for internal parties about past performance is provided by:
- A.
Budget reports
- B.
Financial accounting reports
- C.
Managerial accounting reports
- D.
Planning reports
- 28.Managerial accountants perform which of the following tasks?
- A.
Ensure financial records are correct
- B.
Help design information systems
- C.
Provide decision support
- D.
All of the above
- 29.Managerial accounts may be responsible for:
- A.
Analysing data
- B.
Communicating results
- C.
Providing decision support
- D.
All of the above
- 30.Which of the following skills are required of managerial accountants?
- A.
The ability to work as a team
- B.
Analytical skills
- C.
Oral and written communication skills
- D.
All of the above
- 31.Managerial accounting is needed by which type of company?
- A.
Manufactures
- B.
Retailers
- C.
Service
- D.
All of the above
- 32.A company's Board of Directors meets:
- A.
Annually
- B.
Monthly
- C.
Periodically, as needs dictate
- D.
Quarterly
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