Management accounting provides information to managers for planning, control, and decision making purposes. The management accounting system must be tailored to the organization's structure and management style to ensure the right information is provided to the right people. Factors like information needs, sources of data, conversion methods, and costs must be considered when setting up an effective management accounting system.
1. Diploma
in
Business Administration
Study Manual
Managerial Accounting
The Association of Business Executives
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3. ABE Diploma in Business Administration
Study Manual
Managerial Accounting
Contents
Study Title Page
Unit
Syllabus i
1 Management Accounting and Information 1
Management Accounting 2
Information 4
Collection and Measurement of Information 6
Information for Strategic, Operational and Management Control 11
Information for Decision Making 14
2 Cost Categorisation and Classification 17
Accounting Concepts and Classifications 19
Categorising Cost to Aid Decision Making and Control 21
Management Responsibility Levels 29
Cost Units 30
Cost Codes 31
Patterns of Cost Behaviour 32
Influences on Activity Levels 36
Numerical Example of Cost Behaviour 36
3 Direct and Indirect Costs 39
Material Costs 40
Labour Costs 43
Decision Making and Direct Costs 48
Overhead and Overhead Cost 49
4 Absorption Costing 51
Definition and Mechanics of Absorption Costing 52
Cost Allocation 53
Cost Apportionment 54
Overhead Absorption 59
Treatment of Administration and Selling and Distribution Overhead 64
Uses of Absorption Costing 65
4. 5 Marginal Costing 69
Definitions of Marginal Costing and Contribution 70
Marginal Versus Absorption Costing 72
Limitation of Absorption Costing 76
Application of Marginal and Absorption Costing 79
6 Activity-Based and Other Modern Costing Methods 91
Activity-Based Costing (ABC) 92
Throughput Accounting 106
Backflush Accounting 107
Just-in-Time (JIT) Manufacturing 108
7 Product Costing 113
Costing Techniques and Costing Methods 115
Job Costing 116
Batch Costing 121
Contract Costing 122
Process Costing 124
Treatment of Process Losses 127
Work-In-Progress Valuation 131
Joint Products and By-Products 134
Other Process Costing Considerations 139
8 Cost-Volume-Profit Analysis 141
The Concept of Break-Even Analysis 142
Break-Even Charts (Cost-Volume-Profit Charts) 146
The Profit/Volume Graph (or Profit Graph) 154
Sensitivity Analysis 158
9 Planning and Decision Making 161
The Principles of Decision Making 162
Decision-Making Criteria 167
Costing and Decision Making 169
10 Pricing Policies 177
Fixing the Price 178
Pricing Decisions 178
Practical Pricing Strategies 182
Further Aspects of Pricing Policy 188
11 Budgetary Control 191
Definitions and Principles 192
The Budgetary Process 196
Budgetary Procedure 201
Changes to the Budget 213
5. 12 Further Budgetary Control Techniques 215
Flexible Budgets 216
Budgeting With Uncertainty 221
Budget Problems and Methods to Overcome Them 224
Alternative Budgetary Approaches 227
Behavioural Aspects of Budgeting 230
13 Standard Costing 137
Principles of Standard Costing 238
Setting Standards 241
Setting Standards – The Learning Curve 247
The Standard Hour 253
Measures of Capacity 254
14 Standard Costing Basic Variance Analysis 259
Purpose of Variance Analysis 260
Types of Variance 264
Marginal versus Absorption Costing 269
Mix and Yield Variances 271
15 Advanced Variance Analysis and Investigation 277
Planning and Operational Variances 278
Investigation of Variances 287
Variance Interpretation 297
Interdependence between Variances 298
16 Management of Working Capital 301
Principles of Working Capital 302
Management of Working Capital Components 303
Dangers of Overtrading 306
Preparation of Cash Budgets 306
Cash Operating Cycle 308
17 Financial Mathematics I: Interest and Present Value 311
Simple Interest 312
Compound Interest 314
Present Value 318
To Find the Rate or the Number of Years 322
Depreciation 323
18 Financial Mathematics II: Capital Investment Appraisal 333
Payback Method 335
Return on Investment Method 336
Introduction to Discounted Cash Flow Methods 337
The Two Basic DCF Methods 341
19 Presentation of Management Information 353
General Principles of Presentation 354
Management Information 354