Cost Classification & Ethics
75 practice questions with explanations — 15 free to try
PassNova has 75 AAT Level 2 Accounting practice questions on Cost Classification & Ethics, each with a clear explanation. A 15-question taster is free with no sign-up; the full bank is part of PassNova Premium. Updated for 2026.
Cost Classification & Ethics: example questions & answers
2 worked examples with answers and explanations below. Try 15 AAT Level 2 Accounting questions free in the browser; the full 75-question Cost Classification & Ethics bank is part of PassNova Premium.
A cost that stays the same in total regardless of the level of output, such as factory rent, is classified as a:
- AVariable cost
- BFixed cost✓
- CStepped cost
- DDirect material cost
Answer: A fixed cost remains constant in total over a range of activity. Factory rent does not change whether output rises or falls within that range.
A cost that changes in direct proportion to the level of activity, such as raw materials used in production, is a:
- AFixed cost
- BVariable cost✓
- CSemi-variable cost
- DSunk cost
Answer: A variable cost rises and falls in line with output. Raw material consumption increases as more units are produced, making it a variable cost.