CIMA Revision Cards: Management Accounting Fundamentals (CIMA Revision Cards) PDF
Preview CIMA Revision Cards: Management Accounting Fundamentals (CIMA Revision Cards)
CIMA REVISION CARDS Management Accounting Fundamentals Janet Walker Certificate Level Paper C1 AMSTERDAM l BOSTON l HEIDELBERG l LONDON l NEW YORK l OXFORD PARIS l SAN DIEGO l SAN FRANCISCO l SINGAPORE l SYDNEY l TOKYO ElsevierButterworth-Heinemann LinacreHouse,JordanHill,OxfordOX28DP 30,CorporateDrive,Burlington,MA01803 Firstpublished2005 Copyright(cid:1)2005,ElsevierLtd.Allrightsreserved Nopartofthispublicationmaybereproducedinanymaterialform(includingphotocopyingorstoringinanymediumbyelectronicmeansand whetherornottransientlyorincidentallytosomeotheruseofthispublication)withoutthewrittenpermissionofthecopyrightholder,exceptin accordancewiththeprovisionsoftheCopyright,DesignsandPatentsAct1988,orunderthetermsofalicenceissuedbytheCopyrightLicensing AgencyLtd,90TottenhamCourtRoad,London,EnglandW1T4LP.Applicationsforthecopyrightholder’swrittenpermissiontoreproduceanypart ofthispublicationshouldbeaddressedtothepublisher. PermissionsmaybesoughtdirectlyfromElsevier’sScience&TechnologyRightsDepartmentinOxford,UK:phone:(+44)1865843830,fax:(+44) 1865853333,e-mail:permissions@elsevier.co.uk.Youmayalsocompleteyourrequeston-lineviatheElsevierhomepage (http://www.elsevier.com),byselecting‘CustomerSupport’andthen‘ObtainingPermissions’ BritishLibraryCataloguinginPublicationData AcataloguerecordforthisbookisavailablefromtheBritishLibrary LibraryofCongressCataloginginPublicationData AcataloguerecordforthisbookisavailablefromtheLibraryofCongress ISBN0750664770 ForinformationonallElsevierButterworth-Heinemannpublicationsvisitourwebsiteathttp://books.elsevier.com PrintedandboundinGreatBritain Welcome toCIMA’sOfficial RevisionCards. Thesecards have beendesigned to: . Save youtime bysummarisingthe syllabus inaconcise form . Jog your memory throughthe use ofdiagrams andbulletpoints . Follow the structure ofthe CIMA OfficialStudySystems . Refer torelevant questions found within thePreparing for theAssessment section ofthe studysystem . Provide you withplenty ofassessmenttips andhints Ensure assessmentsuccess byrevising withthe only revisioncards endorsed byCIMA. TABLE OF CONTENTS 1. Basicaspects of costaccounting.................................................. 1 2. Materials.............................................................................. 11 3. Labour................................................................................. 19 4. Overhead.............................................................................. 25 5. Specificorder costing............................................................... 31 6. Continuous operation costing....................................................... 37 7. Bookkeeping systems............................................................... 55 8. Absorption costingand marginal costing.......................................... 63 9. Breakeven analysisand decision-making......................................... 71 10. Budgetaryplanning and control.................................................... 87 11. Standard costingand varianceanalysis........................................... 101 Basic Aspects of Cost Accounting Thefundamental conceptsof theframework of costaccounting Topics . Costunitsandcost centres . Theclassification of costs Key study system questions . Thecoding ofcosts . Theelements ofcost 1 Costbehaviour . Costbehaviour patterns 3 High-lowmethod . Analysingsemi-variable costs 1 Basic Aspects of Cost Accounting Cost units and cost centres Definitions Cost unit examples Costunit–aunitofproductorserviceinrelation (cid:1) to whichcosts areascertained Product:litreofpaint, batch ofcakes Cost centre –a productionorservice location, Service: restaurantmeal,tonne-mile function, activityoritemof equipmentforwhich costsare accumulated (cid:1) Cost centre examples The link between cost centres and cost units Location: production departmentA Function:administration Acostcentreactsasacollectingplaceforcosts. Activity: invoice processing Thetotalcost centrecostmaythenberelatedto Item ofequipment:stamping machine thecostunitswhichhavepassedthroughthecost centreto determine acost perunit 2 —————————————————————————————————————————— –––––––––––––––––––––––––––––––––––––– Basic Aspects of Cost Accounting The classification of costs Costs areclassifiedso thattheycan bearranged into logicalgroups forfurtheranalysis Types of cost classifications K Natureof cost:material, labour orexpense (cid:1) Indirect costsarealso referred to as K Direct orindirect overheads K Functionalanalysis: production, selling, distribution, administration (cid:1) Semi-fixed, semi-variable ormixedcosts K Fixedor variable are partlyfixed andpartly variable K Controllableand non-controllable:important whenpreparing management information K Normal andabnormal:highlightingabnormal events drawsthem tomanagers’ attention K Relevant andnon-relevant:in respectof aparticular decision 3 —————————————————————————————————————————— Basic Aspects of Cost Accounting The coding of costs Definition Requirements for efficient coding system Code –asystem ofsymbolsdesigned tobe appliedto aclassifiedset ofitemsto give abrief K Eachcode shouldbe uniqueandcertain accuratereference,facilitatingentry,collationand K Coding systemshould be comprehensive and analysis capableof expandingtoinclude new items K Codenumbersshould be asbrief aspossible K Incorporate checkdigitsincomputerised codes Advantages of a coding system K Only authorised personnelpermitted toaddnew codes tosystem K Codenumbersshould allbe ofthe same length K Acodeisusually briefer thanadescription K Reduces ambiguity K Assistscomputerised processing ofdata 4 —————————————————————————————————————————— –––––––––––––––––––––––––––––––––––––– Basic Aspects of Cost Accounting The elements of cost Study tip Remember this! Asoundunderstandingofthedifferencebetween Direct costsarethose thatcan bespecifically totaldirect cost,totalproduction cost andtotal identified withaparticular cost unit cost willhelpyou inassessmentquestions ona varietyof different topics Direct materials þDirect labour þDirect expenses (cid:1) Totaldirect cost isalso referred to as ¼Total direct cost primecost þIndirect materials (cid:1) þIndirect labour Indirectmaterials,indirectlabourandindirect þIndirect expenses expensesassociated with productionare ¼Total productioncost alsoreferred toasproduction overhead (cid:1) þOther overhead Otheroverhead includesselling, ¼Total cost distributionandadministration overhead 5 —————————————————————————————————————————— Basic Aspects of Cost Accounting Cost behaviour patterns Cost behaviourpatterns describe the waythatcostsbehave inrelationto changesinthe level of activity. Definition Fixedcost–acostwhich,withincertainactivity limits,isnotaffectedbyfluctuationsinthelevelof activity Examples offixed costs K Rent ofthe factory K Accountant’s salary Definition Steppedfixedcost–acostwhichremainsconstant forarangeofactivities,butwhichincreasestothe nextstepwhenacriticallevelofactivityisreached Examples ofsteppedfixed costs K Supervisors’ salaries K Machine rentals 6 ——————————————————————————————————————————
Description:The list of books you might like
