Seventh edition

Topics

1. The nature and purpose of management accounting

1.1 Explain the role and objectives of management accounting
1.2 Describe the key differences between financial, cost and management accounting.
1.3 Describe how management accounting provides information and creates value.
1.4 Outline the core parts of management accounting systems and how they enable strategic management

2. Cost classification and cost-volume-profit analysis

2.1 Describe different cost classifications and their characteristics
2.2 Apply relevant techniques to separate costs into their fixed and variable components
2.3 Apply the principles of cost-volume-profit analysis in organisations

3. Types of product costing

3.1 Explain the concepts underpinning product costing and the need for absorption costing
3.2 Apply overhead allocation and apportionment techniques
3.3 Apply overhead absorption and marginal costing techniques
3.4 Apply the principles of activity-based costing to and contrast it to other costing techniques
3.5 Explain the differences between job and process costing techniques
3.6 Apply costing principles to job costing and process costing organisations

4. Budgeting and variance analysis

4.1 Explain the nature of budgets and the reasons that organisations use budgets
4.2 Prepare an operations budget, cash budget and budgeted financial statements
4.3 Explain incremental and zero-based budgeting approaches
4.4 Identify and analyse the human behavioural challenges to the budgeting process in organisations
4.5 Explain how standard costing can be used to assist in cost control and efficient resource allocation
4.6 Calculate and analyse various variances and identify possible corrective actions

5. Performance measurement

5.1 Explain the characteristics and purpose of performance measurement systems
5.2 Analyse the different types of financial performance measures and their limitations
5.3 Describe the key characteristics of the Balanced Scorecard and its advantages over traditional performance measurement systems
5.4 Outline the characteristics of reward systems and the circumstances in which they can be tied to performance measures

6. Short-term and long-term decision making

6.1 Explain the steps in the decision-making process
6.2 Use relevant information and apply techniques to support short-term operating decisions
6.3 Apply tools and techniques to support capital expenditure decisions
6.4 Explain the impact of risk on capital expenditure decisions

7. Inventory and pricing decisions

7.1 Evaluate the principles of just-in-time
7.2 Explain the importance of inventory control and apply inventory management techniques.
7.3 Establish and apply the appropriate approach for long-term pricing decisions

 Module Name Exam topic weighting %
 1 The nature and purpose of management accounting  7
 2 Cost classification and cost-volume-profit analysis 15
 3 Types of product costing 23
 4 Budgeting and variance analysis 20
 5 Performance measurement 12
 6 Short-term and long-term decision making 18
 7 Inventory and pricing decisions 5