General overview

This exam covers an understanding of developments in management accounting and the tools management accountants use to cost products and services, and to develop and manage budgets. It also covers performance management and control; planning and assessment of project alternatives; and an understanding of the nature, functions, structures and operations of management.


1. Conceptual issues and behavioural implications
Explain the historical development of management accounting
1.2 Analyse the key differences between financial, cost and management accounting
1.3 Describe how management accounting creates value
1.4 Analyse the current influences on management accounting
1.5 Explain the range of theories that underpin management accounting and how they have an influence on practice
1.6 Outline the core parts of management accounting systems and how they enable strategic management
1.7 Analyse the roles of management accountants in cross-functional teams
1.8 Identify and explain appropriate internal controls for management and accounting systems in a range of situations
1.9 Explain how organisational behaviour can impact the creation of organisational value
1.10 Describe the increasing awareness of sustainability and its relationship to management accounting

2. Decision making
2.1 Apply the steps in the decision making process

2.1.1 Define the problem
2.1.2 Identify the decision making criteria
2.1.3 Develop alternatives
2.1.4 Analyse alternatives
2.1.5 Select an alternative

2.2 Apply relevant information guidelines for short-term alternative choice operating decisions
2.3 Identify the quantitative and qualitative criteria involved in accepting a project
2.4 Analyse the challenges posed by differences between a project and an organisation’s risk profiles
2.5 Explain the impact of cash flows and risks on project decision making

3. Budgeting
3.1 Identify and analyse the human behavioural challenges to the budgeting process in organisations
3.2 Explain the nature of budgets and the reasons that organisations use budgets
3.3 Prepare an operations budget
3.4 Prepare a cash budget

4. Cost behaviour
4.1 Describe the nature of costs and their behaviour
4.2 Apply relevant techniques to separate costs into their fixed and variable components
4.3 Apply the principles of cost-volume-profit analysis in organisations

5. Overhead costing - product and service costing
5.1 Explain three methods of departmental overhead allocation
5.2 Explain the concepts underpinning product costing in organisations
5.3 Develop different product costing statements involving production resource costs
5.4 Evaluate the difference between direct production costs and indirect overhead costs
5.5 Apply the principles of absorption and variable costing to product costing analysis

6. Overhead costing - activity based costing
6.1 Identify and apply the principles of activity-based costing to allocate overheads in organisations

7. Process and job costing
Explain the differences between job and process costing techniques
7.2 Apply costing principles to job costing and process costing organisations

8. Standard costing
Explain how standard costing can be used to assist in cost control and efficient resource allocation

9. Variance analysis 
9.1 Define and describe a variance
9.2 Explain the causes of variances and associated corrective actions
9.3 Calculate a variance

10. Capital expenditure
10.1 Analyse capital expenditure decisions in organisations using relevant tools and techniques
10.2 Apply capital expenditure analysis to project planning and managing uncertain scenarios through scenario analysis

11. Inventory, pricing decisions and cost-volume-profit analysis
11.1 Evaluate the principles of just-in-time
11.2 Apply the economic order quantity formula to determine order quantities for inventory management
11.3 Establish and apply the appropriate approach for long-term pricing decisions

12. Performance measurement and evaluation
12.1 Explain the characteristics and purpose of performance measurement systems
12.2 Analyse the different types of financial performance measures and their limitations
12.3 Describe the key characteristics of the Balanced Scorecard and its advantages over traditional performance measurement systems
12.4 Outline the characteristics of reward systems and the circumstances in which they can be tied to performance measures

Exam topic weightings
Conceptual issues and behavioural implications 7%
Decision making 13%
Budgeting 10%
Cost behaviour 15%
Overhead costing - product and service costing 13%
Overhead costing - activity based costing 5%
Process and job costing 5%
Standard costing 5%
Variance analysis                                                   5%
Capital expenditure 5%
Inventory, pricing decisions and cost-volume-profit analysis                                      5%
Performance measurement and evaluation 12%
Total 100%