CIMA C1Fundamentals of Management Accounting

CIMA C1Weekly QuizWeek 1 to 7

What are the main 4 reasons a company will calculate a cost value for its products?

Write down 4 major differences between Financial accounting & Management accounting

Managers in a business carry out 3 main activities, what are they?

Draw a diagram to illustrate the 3 main Levels of Management in a typical Company

Quiz

Draw a ‘typical’ Company organisation chart showing a range of different functions or disciplines

What is a Cost Unit? There are 3 main Cost Classifications, What

are they? With examples, describe the Direct &

Indirect Cost Classifications With examples, describe Production & Non-

Production Cost categories

Quiz

Last week we looked at a ‘cost structure/classification’ chart, draw it out

In Cost behaviour studies, there are often said to be 4 types of cost behaviour pattern, what are they? & sketch the appropriate graph for each.

What is the ‘Level of Activity’ a measure of? Give some examples of Semi-Variable Costs

Quiz

If you are given Total Costs for “ Levels of Activity’’, what method can you use to ‘split’ variable from fixed Costs?

Write out the ‘High/Low’ method, what is the grid you would use?

What adjustments might you make to the Total Costs for ‘Step Costs’ & ‘Bulk Discounts’, do you subtract Step Costs & add Bulk Discounts?: True or False?

Quiz

What is a: Cost centre? Revenue Centre? Profit Centre? Investment Centre? How do you measure Performance in an

Investment centre? What is the R.O.C.E. formula?

Quiz

What is an Overhead? What are the three ‘A’s? What is ‘Allocation’ of Overheads? What is ‘Apportionment’ of Overheads? What is re-Apportionment of Overheads? What is ‘Absorption’ of Overheads? Look at the diagram on the next slide & fill

in the areas you know

Quiz

Quiz

Quiz

DirectProduction

Costs

Full Absorption CostPer Unit

IndirectProduction

Costs

ProductionCost

Centre

ServiceCost

Centre

Direct MaterialsDirect LabourDirect Expenses

Allocate Directly:

AllocateApportion

Re-Apportion

Absorption

OAR = Budgeted O/H B Level of Activity

In order to re-apportion Service Centre Costs to Production Cost Centres, 2 methods are required in your syllabus, what are they?

What ‘golden rules’ do you need to follow with Service to Production re-apportionment?

Answer: Service to Service, reciprocal if necessary, then Service to Production.

Quiz

Absorption rates are NOT based on ‘Actual’ or ‘budgeted’ Overhead Costs?

Why are BOAR rates set in advance? What is the OAR Formula? What 3 methods attach themselves to the

‘Budgeted Level of Activity’ OAR Rates can be broken into 2 categories,

what are they? Answer: Blanket or Departmental

Quiz

Because BOAR’s are based on estimates, what is the issue that could occur at the end of the accounting period?

What is OVER Absorption? What is UNDER Absorption? You have been taught a ‘3 Box’ layout to

measure Under/Over Absorption, write out the pro-forma layout

Quiz

Define what job costing is What records are kept to keep track of job

costs? What is batch costing? How do you calculate the cost per unit

under batch costing? What is ‘pricing’? What are the TWO likely pricing methods

you have to use in CIMA C1?

Quiz

What is ‘Mark-up’ based on? What is ‘Margin’ based on? What is ‘Marginal’ costing?, what happens

to ‘Overhead’ Costs? Write out the template for Absorption

Costing Write out the template for Marginal Costing What is ‘Contribution’? What is deducted from Contribution to get

‘Net Profit’?

Quiz

IF Sales & Production quantities differ, the profits WILL DIFFER – True or False?

Write out a diagram showing what happens when Opening & Closing Stock differ or remain the same. These are KEY rules & need to be learned.

Quiz

If Op Stock > Close Stock

If Op Stock = Close Stock

If Op Stock < Close Stock

Absorption & Marginal Costing:

MC Profit > AC Profit

MC Profit = AC Profit

MC Profit < AC Profit

These are KEY Rules: remember them –

Process Costing has 2 Main features, what are they?

In out ‘T’ account, what is on the Debit & Credit sides?

What is a NORMAL LOSS? What is an ABNORMAL LOSS? What is an ABNORMAL GAIN? How do you calculate the Cost per Unit of

‘good’ output?

Quiz

What is a Conversion Cost? What is an Equivalent Unit? There are 3 steps to calculating an EU, what

are they?1. Statement of EU’s2. Cost per EU3. Statement of Evaluation

Quiz

What are Joint Products? What are By-products? Give examples Up to the ‘slit off’ point’ costs are classed as

joint or shared, after this point additional costs may be incurred for various products.

What methods are used to split joint or common costs?

1. Physical quantity2. Sales value

Quiz

What is the definition of a Budget? Why does a Company have a budget? What are the most common ‘Functional’

Budgets in use by a Manufacturing Company?

What is a ‘Master Budget’ & what 3 elements does it have?

What is a ‘Budget Committee’? What is a ‘Budget Manual’? What is a ‘PBF’, Principal Budget Factor?

Quiz

In what order are Budgets prepared for a typical Manufacturing Company?

What are the ‘Golden Rules’ concerning ‘Opening’ & ‘Closing’ inventory?, which is ADDED & which is SUBTRACTED to Production/Usage Budgets?

What is a ‘Cash Budget’ & what should be included/excluded?

What is the issue regarding TIME with Cash Budgets?

Quiz

What is a ‘Fixed’ Budget? What is a ‘Flexed Budget’? What type of Cost Behaviour are you

interested in for a ‘Flexed’ Budget? Who is in this picture?

Quiz

What is a Standard Cost? What is a Variance? What is a Standard Cost Card? What are the 4 types of Standard Cost? Describe an Ideal Standard Describe a Current Standard Describe an Attainable Standard Describe a Basic Standard

Quiz

A Variance can be ---------- or -------? Draw out the ‘Family Tree’ of Variances, with

the appropriate formulae What does AQ, AP, SP & SQ stand for? What is the purpose of an ‘Operating

Statement’? List some basic ‘reasons’ for

Materials/Labour & Overhead Variances

Quiz

Material

Labour

Variable Overheads

Sales

Price Usage

Rate Efficiency

Expenditure Efficiency

Price Volume Profit

Family Tree of Variances