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AAT Sample Assessment

Please can someone assist me in solving task 4 and task 5 e

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  • MindTheGAAPMindTheGAAP Registered Posts: 17
    Would you mind posting the questions? I don't have access to the study resources anymore because I do not have a student membership.
    MAAT AATQB
  • emannehemanneh Registered Posts: 7
    Question
    A business's production costs vary linearly according to the regression equation y=a+bx,
    where x = production volume. Total production costs of 200 units and 2,000 units are £5,000 and £14,000 respectively.

    Calculate the values of a and b.

    Value of a -------------

    Value of b -------------
  • MindTheGAAPMindTheGAAP Registered Posts: 17
    First you lay out the two equations. Y should be the total production costs.
    £5,000 = a + (200 x b)
    £14,000 = a + (2,000 x b)
    Then subtract the two equations.
    £14,000 - £5,000 = (a + (2,000 x b)) - (a + (200 x b))
    = a + (2,000 x b) - a - (200 x b)
    £9,000 = 1,800 x b
    Therefore b = £9,000 / 1,800 = 5.

    Substituting b = 5 into either of the equations can be used to find b.
    £14,000 = a + (2,000 x 5)
    a = £14,000 - £10,000
    a = £4,000
    MAAT AATQB
    rakeshsuwal
  • rakeshsuwalrakeshsuwal LondonRegistered Posts: 79
    Well explained mindthatgaap. Couldn't be any simpler than that I think.
  • emannehemanneh Registered Posts: 7
    Thank you so much, you are star.
  • emannehemanneh Registered Posts: 7
    Sample Assessment
    Task 4

    The following budgeted figures refer to a factory producing a single product. Overheads are absorbed on a budgeted production basis.

    Inventory is valued on a FIFO basis.



    Month 1 Month 2 Month 3
    Operating inventory (units) 0 - -
    Selling price (£) 110 100 90
    Production (units) 10,000 10,000 10,000
    Sales (units) 8,000 9,000 11,000
    Direct materials (£ per unit) 15 15 15
    Direct labour (£ per unit) 10 10 10
    Other variable prod cost (£) 230,000 230,000 230,000
    Fixed prod cost (£) 450,000 450,000 450,000


    Complete the table below. If any answer is zero, enter 'o' into the relevant cell

    For the sales to fixed overheads rows, use positive numbers only (do not use minus signs).

    For the final row, record any loss figure with a minus sign.
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