The aim of the examination is to test the candidate’s knowledge and understanding of the basic principles involved in short-term cost behaviour, short and long-term decision making and short-term profit control, cash management and product cost ascertainment
1.0 Short-term Cost Behaviour
- Effective assessment of the cost effects of the various alternatives open to management
- Fixed, variable and semi-variable costs.
- Segregation of semi-variable costs into fixed and variable components
2.0 Short-term Decision Making
· Basic principles upon which short-term decision should be based
· Marginal costs,
· Contribution Theory.
· Cost Volume Profit Analysis
· Preparation of break even charts-their value and limitations
· Differential costing
· Cash flow statements
· Key or limiting factors
3.0 Short-term Profit Control
- Appreciation of the principles and comprehension of control documents
- Principles of profit control; Preparation of standard costs and budgets; Variance analysis and the reporting of variances; Control standards; Control diagnosis.
4.0 Cash Management
· The effects of management decisions on the cash flows
· Concept of working capital; The effect of sales expansion on working capital; Product/Project life cycles; Cash Budgeting.
5.0 Long-term Decison Making and Control
- Appreciation of useful techniques and the production of data
- Long term financial planning; Discounted cash flow techniques ; Relevant costs
6.0 Product Cost Ascertainment
- The methods by which the costs of operations, processes, departments or products are ascertained
- Problem of charging overheads to products; Overhead analysis technique; Overhead absorption techniques ; Overhead under and over absorption
7.0 Transfer Pricing and Performance Evaluation
- Its importance in decentralized organization
- Reasons for transfer pricing and an introduction to the problems it may create within highly interdependent structures
8.0 Information Processing
- An appreciation of system design
- The influence of information technology upon management accounting systems; The collection, recording and presentation of information for decision making
- A three hour examination 5 questions to be answered from a choice of 6.
Graph paper will be provided and calculators can be used ( no printout, no word display facilities, silent and cordless)