Management Accounting

Supplementary Exam
Allocate your time according to marks
awarded.
Make sure you attempt all parts NO marks
awarded if nothing on the page!
Answer the question set not the one you WISH
had been set! and help the examiner understand
how you have approached it.

EXAM 3 hours (180 minutes)
Variance Analysis
Calculate variances:
Price variances
Efficiency variances
Variable OHs
Fixed OHs
Flex the budget
Reconcile budgeted to actual profit
Absorption and Marginal Costing
Be able to prepare an income statement using:

Traditional Method absorption
New methodology marginal

Be able to explain differences between the two
Understand how differences affect profit
Show this via the income statement



Decision making 2
Understand expected value and uncertainty.
Probability of occurrence x expected profit

Explain the limitations of expected value.
Does not tell the whole story
Based on estimated values
Multiple product analysis

Calculate/draw probability decision trees
Life cycle costing - Explain how different types of costs change at
different stages of the product life cycle.
80 % of a products costs
are locked in during the
planning and design
stage
Majority of costs are
incurred at the
manufacturing stage as
costs have already been
locked in they are difficult
to alter.
Cost management can be most effectively exercised at the planning and
design stage LCC led to the emergence of target costing.
Investment Decision Making
Understand how to calculate the various Investment
decision methods:
IRR
NPV
ARR


Explain the importance of both financial and non-financial
methods to aid capital decision making.

Dont bet on one or two topics!!!