AAT Level 2 Basic Costing Assignment 1

37 Questions | Total Attempts: 1465

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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!


Questions and Answers
  • 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. 
    The primary goal of managerial accounting is to provide information to:
    • 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