practice exam Basic Costing

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Try this practice exam Basic Costing. Basic Costing is an important part of the level 2 certificate in accounting.

Question 1
A company has significant variance for direct materials. Name two managers that should be advised of this fact?

  1. Transport Manager, Finance Manager
  2. Personnel Manager, Warehouse Manager
  3. Sales Manager, Production Manager
  4. Purchasing Manager, Production Manager



Question 2
You are employed in a company that manufactures ladies clothing. As part of your accountancy training you are asked to classify the following items and state

  1. whether the item should be classified as material, labour or expense
  2. whether the item is direct or indirect
  3. whether the item is a fixed, variable or semi-variable cost

Cloth for making jackets

Sewing Machinist who is paid on a piecework basis

Fuel for delivery vehicle

Power for sewing machines, charged at flat rate , plus an amount per unit of power.

Royalties paid to the designer of the clothes

Question 3
A factory  uses a piecework method to pay its’ labour force. It pays £1.50 per unit produced. If Tommy Jones produced  400 units what would his gross wage be



Question 4

A factory uses a time-rate method with a bonus to pay its work force. The time rate used is £11 per hour and a worker is expected to produce 9 units per hour, if the worker exceeds this he is paid a bonus of £0.75 per unit.

If Billy Smith worked 31 hours and produced 290 units, then what would be his gross wage?