AAT Level 2 · PCTN

Principles of Costing

Learn how organisations classify, collect and use cost information for products, services and short-term decisions.

Explore key topicsFind free resources
Unit overview

Understand the method, not just the answer.

PCTN introduces the language of management accounting. The unit helps learners distinguish different types of cost, calculate the cost of output and use simple costing information to support planning and control.

Use this page as a starting point for your revision. Work through the topic areas, identify where confidence is lowest and combine independent practice with the linked downloads and free sessions.

Key topics

What to focus on in PCTN.

These topic summaries provide a revision map rather than a replacement for the current AAT specification and your training-provider materials.

1

Cost classification

Distinguish direct and indirect, fixed and variable, production and non-production costs.

2

Materials, labour and overheads

Calculate the main elements of product or service cost and understand how each is controlled.

3

Inventory control

Apply inventory records, reorder calculations and valuation methods to materials.

4

Cost centres and cost units

Allocate and apportion costs to the parts of an organisation that incur them.

5

Costing methods

Use suitable approaches for jobs, batches, services and units of production.

6

Spreadsheet-based calculations

Organise cost data and perform clear, auditable calculations using spreadsheet tools.

How to revise this unit

  1. 1
    Create a one-page glossary of cost classifications with examples.
  2. 2
    Show every stage of a cost-per-unit calculation rather than jumping to the answer.
  3. 3
    Practise distinguishing allocation from apportionment using realistic overheads.
  4. 4
    Check units carefully: kilograms, labour hours, machine hours and units of output are not interchangeable.

Common pitfalls

  • !
    Treating every production cost as direct.
  • !
    Dividing by the wrong activity level when calculating a rate.
  • !
    Mixing up mark-up, margin and cost per unit.
Free revision posters

Revision posters for PCTN.

Posters published for this unit appear here automatically. Open a poster to view it online or download the PDF for personal study.

Learn live

Upcoming sessions for PCTN.

Published events matching this unit appear automatically. When no direct match exists, the page may show another session at the same level.

View the full events calendar
Continue learning

Related AAT units.

ITBK · Level 2

Introduction to Bookkeeping

Build the double-entry foundations used throughout accounting, from source documents and day books to ledgers and the trial balance.

MATS · Level 3

Management Accounting Techniques

Use costing, budgeting and performance information to support planning, control and operational decision-making.

BESY · Level 2

The Business Environment

Understand how finance operates within organisations, including ethics, communication, technology, sustainability and business structures.

ExamReady

PCTN practice questions and a timed mock, from 27 October.

See what ExamReady offersGet a launch-day reminder
This is independent revision support and is not produced, endorsed or approved by AAT. Always check the current AAT specification, assessment information and your training-provider guidance.