MATS Lesson 1 - Starter

Which of the statements below is TRUE?

• FIFO is a method of paying labour

• Total fixed costs will change when activity levels change

• Indirect costs cannot be directly identified to each unit

• Direct costs cannot be directly identified to each unit

A characteristic of management accounting is?

• Accurate to the nearest penny

• May use estimates where appropriate

• Provides information to external bodies (e.g. HMRC)

• Produced end of year reports (profit and loss/statement of financial position)

An example a direct material in a farm shop is?

• Egg trays for free range eggs

• Telephone charges

• Wages of the shop floor supervisor

• Cost of heating

An example of a semi-variable cost is?

• Salary of a shop worker

• Factory rent

• Salary of a director

• Electricity with a daily fixed standing charge plus a usage charge per KwH

The correct calculation for a management account is?

• Closing inventory + opening inventory = purchases

• Opening inventory + purchases - closing inventory

• Opening inventory + purchases + closing inventory

• Purchases + closing inventory = manufacturing overheads

An example of indirect labour would be wages of a:

• 
• 
• 
• 

Using the information from the image, what will be the total gross wage due to employee "D Travis"

• £463

• £400

• £342

• £436

Which one is the fixed cost?

• At 3000 units cost = £9000, at 12000 units cost = £36000

• At 1200 units cost = £4 per unit, at 2400 units cost = £4800

Total overheads are £200,000. Machine hours used are budgeted to be 20,000 hours. The OAR is?

• £100 per machine hour

• £10.50 per machine hour

• £1 per machine hour

• £10 per machine hour

Inventory issued is valued at the most recent purchase price - this is a characteristic of

• FIFO

• LIFO

• AVCO