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US CMA | CMA USA Part II Decision Analysis sunbject details

US CMA | CMA USA Part II Decision Analysis

US CMA | CMA USA Part II Decision Analysis-Before going into that lets know a little bit about CA USA Course syllabus.-US CMA | CMA USA Part II Financial Statement Analysis-Founded in 1887, the AICPA represents the CPA profession nationally regarding rule-making and standard-setting, and serves as an advocate before legislative bodies, public interest groups and other professional organizations. The AICPA develops standards for audits of private companies and other services by CPAs; provides educational guidance materials to its members; develops and grades the Uniform CPA Examination; and monitors and enforces compliance with the profession’s technical and ethical standards.

 The AICPA’s founding established accountancy as a profession distinguished by rigorous educational requirements, high professional standards, a strict code of professional ethics, a licensing status and a commitment to serving the public interest.

Decision Analysis covers about 20% weight in the whole syllabus

The below topics are to be followed for effective preparation in level C:

Relevant data concepts; cost-volume-profit analysis; marginal analysis; make vs. buy decisions; income tax implications for operational decision analysis; pricing methodologies including market comparable, cost-based and value-based approaches.

US CMA | CMA USA Part II Decision Analysis

Suggested Reading List is listed as follows:

  1. Blocher, Edward, J., Stout, David E., Juras, Paul E., and Cokins, Gary, Cost Management: A Strategic Emphasis, 6 th edition, McGraw Hill, New York, NY, 2013.
  2. Horngren, Charles T., Datar, Srikant, Rajan, Madhav, Cost Accounting: A Managerial Emphasis, 14th edition, Prentice -Hall, Upper Saddle River, NJ, 2012

The following are the Content Specification Outlines

1. Cost/volume/profit analysis

Costvolumeprofit (CVP), in managerial economics, is a form of cost accounting. It is a simplified model, useful for elementary instruction and for short-run

a. Breakeven analysis

b. Profit performance and alternative operating levels

c. Analysis of multiple products

2. Marginal analysis-Marginalism is a theory of economics that attempts to explain the discrepancy in the value of goods and services by reference to their secondary, or marginal, utility. The reason why the price of diamonds is higher than that of water, for example, owes to the greater additional satisfaction of the diamonds over the water. Thus, while the water has greater total utility, the diamond has greater marginal utility.

Although the central concept of marginalism is that of marginal utility, marginalists, following the lead of Alfred Marshall, drew upon the idea of marginal physical productivity in explanation of cost. The neoclassical tradition that emerged from British marginalism abandoned the concept of utility and gave marginal rates of substitution a more fundamental role in analysis.Marginalism is an integral part of mainstream economic theory.

a. Sunk costs, opportunity costs and other related concepts

b. Marginal costs and marginal revenue

c. Special orders and pricing

d. Make versus buy

e. Sell or process further

f. Add or drop a segment

g. Capacity considerations

3. Pricing

Pricing is the process whereby a business sets the price at which it will sell its products and services, and may be part of the business’s marketing plan. In setting prices, the business will take into account the price at which it could acquire the goods, the manufacturing cost, the market place, competition, market condition, brand, and quality of product.

Pricing is a fundamental aspect of financial modeling and is one of the four Ps of the marketing mix. (The other three aspects are product, promotion, and place.) Price is the only revenue generating element amongst the four Ps, the rest being cost centers. However, the other Ps of marketing will contribute to decreasing price elasticity and so enable price increases to drive greater revenue and profits.

a. Pricing methodologies

b. Target costing

c. Elasticity of demand

d. Product life cycle considerations

e. Market structure considerations

US CMA | CMA USA Part II Decision Analysis-

CMA EXAM

RATIO DEFINITIONS

Following are some of the useful abbreviations

  • EBIT = Earnings before interest and taxes
  • EBITDA = Earnings before interest, taxes, depreciation and amortization
  • EBT = Earnings before taxes
  • EPS = Earnings per share
  • ROA = Return on assets
  • ROE = Return on equity

US CMA | CMA USA Part II Decision Analysis

US CMA | CMA USA Subject wise Weightage :   Once you have received authorization from ICMA, it is your responsibility to schedule your appointment at a Prometric Testing Center. Log onto www.prometric.com/ICMA to locate a testing center, schedule, confirm, reschedule, or cancel your appointment 24 hours, 7 days a week. Instructions are provided by ICMA at the time your authorization letter is emailed that provides further options for scheduling. ICMA is not responsible if you delay scheduling and there are no longer appointments available within your authorization period. You will be given a confirmation number at the time you schedule an appointment; you should make a note of this number. If you do not schedule an appointment or you don’t appear for a schedule appointment in the selected testing window, you will forfeit your exam fee.

The CMA examination is given in a computer-based format, and is offered at Prometric Testing Centers located throughout the world. An up-to-date listing of all Prometric Testing Centers can be found at Prometric’s website. www.prometric.com/ICMA. Parts 1 and 2 are offered during the following three testing windows. January/February May/June September/October Registrations for Parts 1 and 2 will close on or after the 15th of February, June, and October. Register for the exam: 1. On-line at the online store. 2. Calling 800-638-4427, or (201) 573-9000 with your credit card information.

US CMA | CMA USA Part II Decision Analysis

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