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It's Chartered Institute of Management Accountants Course: C-01 Fundamentals of Management Accounting ,Class LSBF Manchester ,Week 7 2012 Q's By Sir Ian Wilson.
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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