LCCI Cost Accounting Third Level(3016) Series 2, 3 & 4

The aim of the examination is to test the candidate’s knowledge and understanding of

  • The methods, principles and techniques by which both planned and actual costs of operations, processes, departments, products or services are established
  • Responsibility for effective use of resources involving control by variance analysis
  • Relevant costs for decision making


1.0 Further aspects of the Second Level Cost Accounting Syllabus

2.0 Stock Control

  • Use of free stock balance. Calculation and use of economic order quantity(EOQ)

3.0 Marginal Costing

  • Distinction from the absorption costing principle particularly as to the effect on stock valuation and reported profits
  • Relevance and use of contribution as a basis for various decisions, particularly with reference to limiting factors. Opportunity costs. Avoidable costs. Sunk costs. Calculation of break-even points. Break-even charts involving traditional, contribution and profit volume(P/V) presentations

4.0 Variance Accounting

  • Preparation and coordination of functional, cash and master budgets. Limiting factor. Fixed, flexible and rolling budgets. Human behaviour considerations. Setting standard costs. Types of standard. Comprehensive sales and production cost variance analysis, including mixture variances. Calculation and relevance of control ratios-activity, capacity and efficiency

5.0 Accounting Systems

  • Interlocking and integrated accounting systems
  • Use of control accounts. Reconciliation and causes of different profits
  • Notional costs

6.0 Presentation of information to management


  • A 3- hour examination. 5 questions are to be answered from a choice of 6

Graph paper are provided. Calculators ( no printout, silent, cordlss no word display facilities are allowed.

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