PracticeVideosBlogFlashcardsEspañol
All Practice Exams

100+ Free AAT Level 2 Principles of Costing Practice Questions

AAT Level 2 Certificate in Accounting (Q2022) - Principles of Costing practice questions are available now; exam metadata is being verified.

✓ No registration✓ No credit card✓ No hidden fees✓ Start practicing immediately
Not published at unit level Pass Rate
100+ Questions
100% Free
1 / 100
Question 1
Score: 0/0

Overheads of £45,000 are apportioned to three departments by number of employees: A has 20, B has 15, C has 10. How much is apportioned to Department B?

A
B
C
D
to track
Same family resources

Explore More AAT Accounting Qualifications

Continue into nearby exams from the same family. Each card keeps practice questions, study guides, flashcards, videos, and articles in one place.

AAT Level 2 Certificate in Accounting (Q2022) - Introduction to Bookkeeping (ITBK)

Practice Questions

AAT Level 2 Certificate in Accounting (Q2022) - Principles of Bookkeeping Controls (POBC)

Practice Questions

AAT Level 2 Certificate in Accounting (Q2022) - The Business Environment (BESY)

Practice Questions

AAT Level 3 Diploma in Accounting (Q2022) - Business Awareness (BUAW)

Practice Questions

AAT Level 3 Diploma in Accounting (Q2022) - Financial Accounting: Preparing Financial Statements (FAPS)

Practice Questions

AAT Level 3 Diploma in Accounting (Q2022) - Management Accounting Techniques (MATS)

Practice Questions
2026 Statistics

Key Facts: AAT Level 2 Principles of Costing Exam

70%

Pass Mark

AAT Level 2 Assessment Standard

90 min

Assessment Time

AAT Principles of Costing

4

Learning Outcomes

AAT Q2022 Syllabus

20%

Weight in Level 2 Certificate

AAT Level 2 Certificate

CBA

Computer-Based Assessment

AAT Assessment Format

100

Free Practice Questions

OpenExamPrep

AAT Level 2 Principles of Costing (POCG) is a foundation management-accounting unit in the Q2022 Level 2 Certificate in Accounting. It is assessed by a 90-minute computer-based assessment with objective and short calculation tasks, and the standard pass mark is 70%. The four learning outcomes are: understand the cost recording system, use cost recording techniques, provide information on actual and budgeted costs and income, and use tools and techniques to support cost calculations. Core topics include direct/indirect and fixed/variable cost classification, cost coding, FIFO/LIFO/AVCO inventory valuation, labour payment methods, overhead apportionment and absorption, variances, and spreadsheets for costing.

Sample AAT Level 2 Principles of Costing Practice Questions

Try these sample questions to test your AAT Level 2 Principles of Costing exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1In the AAT Principles of Costing syllabus, what is the primary purpose of a costing system within an organisation?
A.To provide management with information to plan, make decisions and control costs
B.To prepare statutory financial statements for HMRC
C.To calculate the corporation tax liability of the business
D.To record only the cash receipts and payments of the business
Explanation: A costing (management accounting) system exists to give internal management the cost information needed to plan, make decisions and control costs. Unlike financial accounting, it is forward-looking and not bound by statutory reporting rules.
2Which of the following best describes a 'cost unit'?
A.A department or section of the business that incurs costs
B.A unit of product or service for which costs are ascertained
C.A person responsible for controlling a budget
D.The total fixed cost of running a factory
Explanation: A cost unit is a unit of output (a product or service) to which costs can be related, such as one chair, one meal or one delivery. It is the basic measure for which a cost is computed.
3A 'cost centre' is best defined as:
A.A single unit of product to which cost is charged
B.The selling price charged to a customer
C.A location, function or item of equipment to which costs are charged
D.A profit target set by senior management
Explanation: A cost centre is a location (e.g. a department), function or item of equipment for which costs are accumulated. Costs are first collected by cost centre before being charged to cost units.
4Costs that can be specifically and directly identified with a cost unit are known as:
A.Indirect costs
B.Fixed costs
C.Period costs
D.Direct costs
Explanation: Direct costs (direct materials, direct labour and direct expenses) can be traced in full to a specific cost unit. Together they make up the prime cost of a unit.
5The sum of direct materials, direct labour and direct expenses is called the:
A.Prime cost
B.Total production cost
C.Overhead cost
D.Marginal cost
Explanation: Prime cost is the total of all direct costs: direct materials + direct labour + direct expenses. Adding production overheads to prime cost gives total production cost.
6Which of the following would normally be classified as a direct material cost for a furniture manufacturer?
A.Factory rent
B.Timber used to make a table
C.Salary of the factory supervisor
D.Lubricating oil for machinery
Explanation: Timber used to build a table can be traced directly to the finished cost unit, so it is a direct material. The other items are indirect (overhead) costs that cannot be traced to a single unit.
7The salary of a factory maintenance engineer who services all machines would be classified as:
A.Direct labour
B.Direct expense
C.Indirect labour
D.Direct material
Explanation: A maintenance engineer servicing all machines cannot be traced to a single cost unit, so the cost is indirect labour, forming part of production overheads.
8A cost that stays the same in total regardless of the level of output (within the relevant range) is a:
A.Variable cost
B.Semi-variable cost
C.Stepped variable cost
D.Fixed cost
Explanation: A fixed cost remains constant in total across changing activity levels within the relevant range, for example factory rent. The fixed cost per unit, however, falls as output rises.
9A cost that changes in direct proportion to the level of activity, such as raw material used per unit, is a:
A.Variable cost
B.Fixed cost
C.Stepped cost
D.Period cost
Explanation: A variable cost increases or decreases in total in proportion to output, while the cost per unit stays constant. Raw materials consumed per unit are a typical example.
10A telephone bill consists of a fixed line rental plus a charge for each call made. This is an example of a:
A.Pure fixed cost
B.Semi-variable cost
C.Pure variable cost
D.Stepped fixed cost
Explanation: A semi-variable (mixed) cost has a fixed element (the line rental) plus a variable element (cost per call). The high-low method is often used to separate the two parts.

About the AAT Level 2 Principles of Costing Practice Questions

Verified exam format metadata for AAT Level 2 Certificate in Accounting (Q2022) - Principles of Costing is pending. The practice questions above remain available while official exam length, timing, passing score, fee, and administrator details are reviewed.