Fundamentals of Management Accounting

Weekly Quiz

Week 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

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

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

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?

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?

What is an Overhead?

What are the three As?

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

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/HB 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.

Absorption rates are NOT based on Actual instead they use 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

Because BOARs 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

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?

What is Mark-up based on?

What is Margin based on?

What is Marginal costing?, what happens to Overhead Costs?

What is Contribution?

What is deducted from Contribution to get Net Profit?

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.

If Op Stock > Close Stock

If Op Stock = Close Stock

If Op Stock < Close Stock

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 a 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?

What is a Conversion Cost?

What is an Equivalent Unit?

There are 3 steps to calculating an EU, what are they?

1. Statement of EUs

2. Cost per EU

3. Statement of Evaluation

What are Joint Products?

What are By-products?

Give examples

Up to the split 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 quantity

2. Sales value

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?

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?

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?

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

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

Material

Labour

Variable Overheads

Sales

Price Usage

Rate Efficiency

Expenditure Efficiency

Price Volume Profit

Family Tree of Variances

What is the Break Even point for a business?

How do you calculate the unit Contribution?

How do you calculate the Total Contribution?

How do you calculate the BEP in units?

What is the Contribution Target?

What is the Margin of Safety (MoS)?

How do you calculate the MoS?

How do you calculate the Contribution to Sales Ratio (C/S Ratio)?

How do you calculate the BE revenue using the C/S Ratio?

Draw a Break Even Graph

Draw a Profit/Volume Chart

What is a Limiting Factor?

How do you calculate the Contribution per Limiting Factor?