ACCA F2 Management Accounting Study Guide
ACCA F2 Management Accounting Study Guide : This is the main document that students and learning and content providers should use as the basis of their studies, instruction and materials respectively. Examinations will be based on the detail of the study guide which comprehensively identifies what could be assessed within any examination session. The study guide is a precise reflection and breakdown of the syllabus. It is divided into sections based on the main capabilities identified in the syllabus. These sections are divided into subject areas which relate to the sub-capabilities included in the detailed syllabus. Subject areas are broken down into sub-headings which describe the detailed outcomes that could be assessed in examinations.
ACCA F2 Management Accounting Study Guide
ACCA F2 Management Accounting Study Guide :
A THE NATURE, SOURCE AND PURPOSE OF MANAGEMENT INFORMATION
1. Accounting for management
a) Describe the purpose and role of cost and management accounting within an organisation.
b) Compare and contrast financial accounting with cost and management accounting.
c) Outline the managerial processes of planning, decision making and control.
d) Explain the difference between strategic, tactical and operational planning.
e) Distinguish between data and information.
f) Identify and explain the attributes of good information.
g) Explain the limitations of management information in providing guidance for managerial decision-making.
2. Sources of data
a) Describe sources of information from within and outside the organisation (including government statistics, financial press, professional or trade associations, quotations and price list.
b) Explain the uses and limitations of published information/data (including information from the internet) .
c) Describe the impact of general economic environment on costs/revenue.
d) Explain sampling techniques (random, systematic, stratified, multistage, cluster and quota) .
e) choose an appropriate sampling method in a specific situation.
3. Cost classification
a) Explain and illustrate production and non production costs.
b) Describe the different elements of non production costs- administrative, selling, distribution and finance.
c) Describe the different elements of production cost- materials, labour and overheads.
d) Explain the importance of the distinction between production and non production costs when valuing output and inventories.
e) Explain and illustrate with examples classifications used in the analysis of the product/service costs including by function, direct and indirect. fixed and variable, stepped fixed and semi variable costs.
f) Explain and illustrate the use of codes in categorising transaction.
g) Describe and illustrate, graphically, different types of cost behaviour.
h) Use high/low analysis to separate the fixed and variable elements of total costs including situations involving semi variable and stepped fixed costs and changes in the variable cost per unit.
i) Explain the structure of linear functions and equations.
j) Explain and illustrate the concept of cost objects, cost units and cost centres.
k) Distinguish between cost, profit, investment and revenue centres.
l) Describe the differing needs for information of cost, profit, investment and revenue centre managers.
4. Presenting information
a) Prepare written reports representing management information in suitable formats according to purpose.
b) Present information using tables, charts and graphs (bar charts, line graphs, pie charts and scatter graphs)
c) Interpret information (including the above tables, charts and graphs) presented in management reports.
B COST ACCOUNTING TECHNIQUES
1. Accounting for material, labour and overheads
a) Accounting for materials
(i) Describe the different procedures and documents necessary for the ordering, receiving and issuing of materials from inventory.
(ii) Describe the control procedures used to monitor physical and ‘book’ inventory and to minimise discrepancies and losses. (iii) Interpret the entries and balances in the material inventory account.
(iv) Identify, explain and calculate the costs of ordering and holding inventory (including buffer inventory)
(v) Calculate and interpret optimal reorder quantities.
(vi) Calculate and interpret optimal reorder quantities when discounts apply
. (vii) Produce calculations to minimise inventory costs when inventory is gradually replenished.
(viii) Describe and apply appropriate methods for establishing reorder levels where demand in the lead time is constant.
(ix) Calculate the value of closing inventory and material issues using LIFO, FIFO and average methods.
b) Accounting for labour
(i) Calculate direct and indirect costs of labour.
(ii) Explain the methods used to relate input labour costs to work done.
(iii) Prepare the journal and ledger entries to record labour cost inputs and outputs.
(iv) Describe different remuneration methods: time-based systems, piecework systems and individual and group incentive schemes.
(v) Calculate the level, and analyse the costs and causes of labour turnover.
(vi) Explain and calculate labour efficiency, capacity and production volume ratios.
(vii) Interpret the entries in the labour account.
c) Accounting for overheads
(i) Explain the different treatment of direct and indirect expenses.
(ii) Describe the procedures involved in determining production overhead absorption rates
(iii) Allocate and apportion production overheads to cost centres using an appropriate basis.
(iv) Reapportion service cost centre costs to production cost centres (including using the reciprocal method where service cost centres work for each other)
(v) Select, apply and discuss appropriate bases for absorption rates.
(vi) Prepare journal and ledger entries for manufacturing overheads incurred and absorbed.
(vii) Calculate and explain the under and over absorption of overheads.
2. Absorption and marginal costing
a) Explain the importance of, and apply, the concept of contribution.
b) Demonstrate and discuss the effect of absorption and marginal costing on inventory valuation and profit determination.c) Calculate profit or loss under absorption and marginal costing.
d) Reconcile the profits or losses calculated under absorption and marginal costing.
e) Describe the advantages and disadvantages of absorption and marginal costing.