Tài liệu ACCA mới nhất môn F2,textbook

Tài liệu ACCA mới nhất môn F2,textbook

Management Accounting

Paper F2

Integrated Course Notes ACF2CN07(D)

BPP provides revision courses, question days, mock days and specific material to assist you in this important phase of your studies

F2 Management Accounting

(Computer Based Exam)

Study Programme

Page

Introduction to the paper and the course (ii)

1 Information for management 1.1

2 Cost classification 2.1

3 Cost behaviour 3.1

4 Expected values and correlation and regression 4.1

End of Day 1 – refer to Course Companion for Home Study ‰

5 Spreadsheets 5.1

6 Materials costs 6.1

7 Labour costs 7.1

8 Overheads and absorption costing 8.1

End of Day 2 – refer to Course Companion for Home Study ‰

9 Absorption costing and marginal costing 9.1

10 Process costing 10.1

11 Process costing, joint products and by-products 11.1

End of Day 3 – refer to Course Companion for Home Study ‰

12 Job and service costing 12.1

End of Day 6 – refer to Course Companion for Home Study ‰

20 Answers to Lecture Examples 20.1

21 Appendix A: Pilot Paper questions 21.1

22 Appendix B: Formulae given in the exam 22.1

Don’t forget to plan your revision phase!

INTRODUCTION

Introduction to Paper F2 Management Accounting

Overall aim of the syllabus

The overall aim of the paper is to develop knowledge and understanding of the application of management accounting techniques to support the management process of planning, control and decision making

The syllabus

The broad syllabus headings are:

A The nature and purpose of cost and management accounting

B Cost classification, behaviour and purpose

C Business mathematics and computer spreadsheets

D Cost accounting techniques

E Budgeting and standard costing

F Short-term decision making techniques

Main capabilities

On successful completion of this paper, candidates should be able to:

• Explain the nature and purpose of Cost and Management Accounting

• Describe costs by classification, behaviour and purpose

• Apply essential business mathematics and use computer spreadsheets

• Explain and co-ordinate budgets and standard costing for planning feedback and control

• Use Management Accounting techniques to make and support decision-making

Links with other papers

This diagram shows where direct (solid line arrows) and indirect (dashed line arrows) links exist between this

APM (P5) Advanced Performance Management

PM (F5) Performance Management

AB (F1)

Accountants in Business

MA (F2) Management Accounting

FM (F9) Financial Management

INTRODUCTION

Assessment methods and format of the exam

Examiner: David Forster

Students have the option to take either a paper-based or a computer-based exam

Both exams contain 100% compulsory questions worth either 1 or 2 marks, making up a total of 90 marks to be completed in two hours as follows:

– 40 two-mark questions

– 10 one-mark questions

Questions will assess all parts of the syllabus and will include both computational and non-computational elements

INTRODUCTION

Course Aims

Achieving ACCA's Study Guide Outcomes

A The nature and purpose of cost and management accounting

A2 Cost and management accounting versus financial accounting Chapter 1

B Cost classification, behaviour and purpose

B1 Production and non-production costs Chapter 2

C Business mathematics and computer spreadsheets

D Cost accounting techniques

D4 Marginal and absorption costing Chapter 9

D5 Job and batch costing Chapter 12

D6 Process costing Chapters 10, 11

D7 Service/operation costing Chapter 12

E Budgeting and standard costing

INTRODUCTION

F Short-term decision making techniques

INTRODUCTION

Classroom tuition and Home study

Your studies for BPP consist of two elements, classroom tuition and home study

Classroom tuition

In class we aim to cover the key areas of the syllabus To ensure examination success you will need to spend private study time reinforcing your classroom course with question practice and reviewing areas of the Course Notes and Study Text

Home study

To support you with your private study BPP provides you with a Course Companion which helps you to work at home and aims to ensure your private study time is effectively used The Course Companion includes a Home Study section which breaks down your home study by days, one to be covered at the end of each day of the course You will find clear guidance as to the time to spend on various activities and their importance

You are also provided with progress tests and two course exams which should be submitted for marking as they become due

These may include questions on topics covered in class and home study

BPP Learn Online

Come and visit the BPP Learn Online free at www.bpp.com/acca/learnonline for exam tips, FAQs and syllabus

health check

ACCA Forum

We have thriving ACCA bulletin boards at www.bpp.com/accaforum Register and discuss your studies with

tutors and students

Helpline

If you have any queries during your private study simply contact your class tutor on the telephone number or e-mail address that they will supply Alternatively, call +44 (0)20 8740 2222 (or your local training centre if outside the London area) and ask for a tutor for this paper to speak to you or to call you back within 24 hours

Feedback

The success of BPP’s courses has been built on what you, the students tell us At the end of the course for each

subject, you will be given a feedback form to complete and return

If you have any issues or ideas before you are given the form to complete, please raise them with the course tutor or relevant head of centre

INTRODUCTION

Key to icons

Question practice from the Study Text

This is a question we recommend you attempt for home study

Real world examples

These can be found in the Course Companion

Section reference in the Study Text

Further reading is needed on this area to consolidate your knowledge

Formula to learn

Formula given in exam

INTRODUCTION

Syllabus Guide Detailed Outcomes

Having studied this chapter you will be able to:

• Distinguish between data and information

• Identify and explain the attributes of good information

• Outline the managerial processes of planning, decision making and control

• Explain the difference between strategic, tactical and operational planning

• Describe the purpose and role of cost and management accounting within an organisation's management information system

• Compare and contrast financial accounting with cost and management accounting

Exam Context

The contents of this chapter are mainly to serve as an introduction to the ACCA's Management Accounting paper

Although this chapter is an introductory chapter it is still highly examinable You should expect questions on every chapter including this one

Qualification Context

Chapter 1 provides an introduction to the management accounting environment and provides a context for the rest of

this syllabus This is examined again at paper F9 (Financial Management) where the relationship between financial

management and management accounts is discussed

Information for

management

1: INFORMATION FOR MANAGEMENT

Overview

Information for management

Role of management

accounting function Data and information Information for planning

Information for control

Information for decision

making

Qualities

Comparison with financial

accounting

1: INFORMATION FOR MANAGEMENT

1 Management accounting

Purpose

1.1 The purpose of management accounting is to assist management in running their business

to achieve an overall objective

1.2 What could a business have as its objective?

1.3 The assumption that will usually be made in your studies is that companies wish to

maximise the wealth of their shareholders

Usually this will be achieved by maximising profit

2 Data and information

2.1 Data is the raw material for data processing

2.2 Information is data that has been processed in some way to make it meaningful to the person who receives it

What are the general qualities of good information?

Solution

3 Planning, control and decision making

3.1 Information for management accounting is likely to be used for planning, control and

decision making

3.2 Planning → establishing objectives

→ selecting appropriate strategies to achieve those objectives

1: INFORMATION FOR MANAGEMENT

The objectives of a firm may be:

Profit making firm Non profit making firm

3.3 Long-term strategic planning (corporate plan) involves determining an organisation's

long-term goals and then selecting appropriate strategies to attain those objectives

3.4 Shorter term planning involves developing tactical and operational plans in order to

achieve the goals of the corporate plan

3.5 Control → There are two key mechanisms within the control process

(1) Actual performance is compared with planned performance of the organisation as set out in the detailed operational plan and adjusted in response

(2) The corporate plan is reviewed to reflect significant new information

3.6 Decision Making → Managers at all levels within an organisation make

1: INFORMATION FOR MANAGEMENT

4.2 Decision-making

There are many decisions managers may have to make such as:

– What should we produce?

– How should we finance the business?

– Is a project worthwhile?

4.3 Planning

Define objectives; assessing future costs and revenues to set up a budget

Planning is essential in assessing the purchasing/production requirements of the business

4.4 Control

Once plans have been made, they must be reviewed to ensure the company is following them and any identified inefficiencies must be addressed

4.5 Performance evaluation

The performance of divisions and employees can be assessed by comparing their

performance against budgets or divisional or individual targets

What information may the managers of a business need?

Solution

External Information Internal Information

1: INFORMATION FOR MANAGEMENT

5 Management accounting and financial accounting

Complete the following table to compare financial and management accounting:

Financial accounting Management accounting

5.1 Thus it is useful to think of the two as

Financial Accounting: recording and reporting historical data

Management Accounting: deciding where the company wants to go and ensuring it gets

there

5.2 It is important to remember that as management accounting is forward looking, it relies

heavily on guesses and approximations, to deal with future uncertainties We therefore have

to use reasonable approximations in all our calculations

6 Chapter summary 1

6.1 Data is raw material for data processing

6.2 Information is data that has been processed in such a way as to be meaningful to the person who receives it

6.3 Good information should be relevant, complete, accurate, clear, timely, appropriately

communicated and the cost of it should be less than the benefit

Chapter 1: Questions

1: QUESTIONS

1.1 Information is data that has been manipulated into a report for a specific purpose

True

1.2 Management accountants may provide information for management on which of the following:

(i) Cost of goods and services

(ii) Actual costs compared to expected costs

(iii) Expected profits and production plans

A (i) only

B (i) and (iii) only

1.3 Management accounts must be reported monthly

True

1.4 (1) Management accounting will report information on the past period in order to compare it to the

original budget

(2) Financial accounting will plan for the future periods

A One true one false

Chapter 1: Answers

Syllabus Guide Detailed Outcomes

Having studied this chapter you will be able to:

• Distinguish between cost, profit, investment and revenue centres

• Describe the differing needs for information of cost, profit, investment and revenue centre managers

• Explain and illustrate production and non-production costs

• Describe the different elements of production cost – materials, labour and overheads

• Describe the different elements of non-production cost – administrative, selling, distribution and finance

• Explain the importance of the distinction between production and non-production costs when valuing output and inventories

• Distinguish between direct and indirect costs in manufacturing and non-manufacturing organisations

• Identify examples of direct and indirect costs in manufacturing and non-manufacturing organisations

• Explain and illustrate the concepts of cost objects, cost units and cost centres

Exam Context

Cost classification is one of the key areas of the syllabus and as well as providing you with key terminology for many of the following chapters, is also very examinable

Qualification Context

This chapter includes terminology that will be used throughout the Fundamentals level of the ACCA qualification and on

to the Professional level of your studies

Business Context

Grouping costs together is essential for a business to be able to analyse costs, budget and plan effectively

Cost classification

Materials

Labour

Overheads

2: COST CLASSIFICATION

1 Introduction to cost classification

1.1 Cost classification is the arrangement of cost items into logical groups for example by their

function (administration, production etc) or by their nature (materials, wages etc)

The eventual aim of costing is to determine the cost of producing a product/service

2 Production and non production costs

Classification by function

2.1 A company may first arrange cost items into groups by function At the highest level there could be groups of production costs and groups of non production costs

Pool of total costs

Costs associated with the All other costs incurred production of goods and in the business

services, from the supply of raw materials to the

warehousing of finished goods

Give some examples of production and non production costs

Solution

2: COST CLASSIFICATION

2.2 Production costs can then the broken down further by their nature

Production costs

Materials Labour Overheads

Cost of materials that Cost of the workforce Cost of any

are used in making the used in making overheads required to

product or service the product support the

2.3 Non production costs can also be broken down further by their nature to aid analysis

Non production costs

All other costs All costs incurred All costs incurred All costs incurred

incurred in in promoting and in making the to finance the

managing the retaining packed product business

organisation customers ready for despatch

and delivery to the

Give examples of non-production costs under each of the four headings above

Solution

Administration Selling Distribution Finance

2: COST CLASSIFICATION

Distinction between production and non production costs

2.4 Remember the eventual aim of costing is to determine the cost of producing a product or service

This information is important to management for many reasons, the three most important being:

(1) Profitability analysis

(2) Selling price determination

(3) Inventory valuation purposes

For the purpose of the syllabus we will focus on the group of production costs identified in the previous section

3 Direct and indirect costs

3.1 Production costs can be split into direct costs and indirect costs of production

3.3 Indirect production costs are those costs which are incurred in the course of making a

product/service but which cannot be identified with a particular cost unit

Indirect production costs are often referred to as production overheads

Identify and group the costs involved in the production of a CD

Solution

Total production costs

2: COST CLASSIFICATION

Identify any direct or indirect non manufacturing costs associated with the production and sale of a

4 Cost objects, cost units and cost centres

Materials Labour Expense Materials Labour Expense

2: COST CLASSIFICATION

Business Appropriate cost unit

Ball bearing manufacturer Batch of ball bearings

Management consultant Project

4.3 A cost centre is a location, function or item of equipment in respect of which costs may be

ascertained and related to cost units for control purposes

Each cost centre acts as a 'collecting place' for certain costs before they are analysed

further Note:

(a) Cost centres may be set up in any way the business thinks appropriate

(b) Usually, only manufacturing costs are considered and hence we will focus on factory

cost centres

We need to distinguish between factory cost centres that are:

(a) production cost centres, through which cost units actually flow;

(b) service cost centres, which support/service the production cost centres

Suggest three examples of production cost centres and service cost centres within a clothes

manufacturing factory

Solution

4.4 Profit centres are similar to cost centres but are accountable for costs and revenues

4.5 Revenue centres are similar to cost centres and profit centres but are accountable for

revenues only

4.6 An investment centre is a profit centre with additional responsibilities for capital

investment

5.4 Direct costs are costs that can be directly traced to a unit

5.5 Indirect costs are costs incurred in production but cannot be directly linked to a unit

5.6 A cost card can be built up for an individual cost unit

Chapter 2: Questions

2: QUESTIONS

2.1 Which of the following is a definition of a cost centre?

A Functions or locations for which costs are ascertained and related to cost units for control

purposes

B Amounts of expenditure attributable to various activities

C A section of an organisation for which budgets are prepared and control exercised (1 mark)

2.2 Which of the following are indirect expenses?

(i) The depreciation of a machine on an assembly line

(ii) The hire cost of maintenance tools or equipment for a factory

(iii) The salary of a supervisor for the assembly line

(iv) Primary packing materials (eg cartons and boxes)

A (i) only

B (i) and (ii)

C (i), (ii) and (iii)

2.3 Which of the following items might be a suitable cost unit within the sales department of a manufacturing company?

Item: 1 Sales commission;

Item 2 Order obtained

Item 3 Unit of product sold

A a unit of product or service in relation to which costs are ascertained

B an amount of expenditure attributable to an activity

C a production or service location, function, activity or item of equipment for which costs are

Chapter 2: Answers

2: ANSWERS

2.1 A This is a definition of a cost centre

2.2 B These are both indirect expenses, because these costs can not be traced directly to the products

made using them

(iii) Would be an indirect labour cost

2.3 A Either calculating the cost of each order obtained or the cost of per unit of each product sold

would be suitable cost units within the sales department, whereas sales commission is an item of expenditure

2.4 C Definition of a cost centre

2.5 A A student may be an appropriate cost unit, but not a cost centre

2.6 B A canteen is a service cost centre as the units do not physically have to flow through it before

being sold

Syllabus Guide Detailed Outcomes

Having studied this chapter you will be able to:

• Describe and illustrate graphically different types of cost behaviour

• Explain and provide examples of costs that fall into the categories of fixed, stepped fixed and variable costs

• Explain the structure of linear functions and equations

• Use high/low analysis to separate the fixed and variable elements of total costs including situations involving stepped fixed costs and changes in the variable cost per unit

Exam Context

As per Chapter 2 (Cost Classification) cost behaviour is a key area of the Management Accounting syllabus and you

should expect it to be examined independently and as part of later chapters

Qualification Context

Again this chapter provides terminology that will be used throughout the foundation level and on to the professional level

of your studies Specifically the high/low method as described here and which re appears in Chapter 13 of this paper will

be used again within the budgeting chapter of paper F5 Performance Management to prepare flexible and flexed budgets

Cost behaviour

3: COST BEHAVIOUR

1 Cost behaviour and output

1.1 A business needs to know how costs behave as production volumes either increase or decrease so that predictions of costs can be made

1.2 It is expected that costs will increase as production increases but, the exact way costs behave as output changes will depend on the nature of the cost

1.3 There is another different way of analysing and classifying costs to that discussed in chapter 2; that is by classifying them according to how they behave as output changes

Types of cost behaviour

(a) Fixed cost – (FC) A fixed cost is a cost which tends to be unaffected by increases or

decreases in the volume of output It would be represented graphically as follows:

Total cost $

Examples include:

(b) Stepped fixed cost – A stepped fixed cost is a cost which is fixed in nature but only within

certain levels of activity It would be represented graphically as follows:

Total cost $

Examples include:

3: COST BEHAVIOUR

(c) Variable cost (VC) – A variable cost is a cost which tends to vary directly with the volume of

output The variable cost per unit is the same amount for each unit produced It would be represented graphically as follows:

Total cost $

Examples include:

(d) Mixed cost (semi-variable cost) – A mixed cost is a cost which contains both fixed and

variable components and so is partly affected by a change in the level of activity It would

be represented graphically as follows:

3: COST BEHAVIOUR

Equation of a line

1.5 If there is a linear relationship between output and total cost then the relationship can be

within this form:

y = a + bx Where y is the dependent variable (eg total cost)

x is the independent variable (eg output

a is the intercept on the y axis (eg fixed cost)

b is the gradient on the line (eg variable costs per unit)

Therefore TC = FC + VC/unit x output

The high/low method is a four-step method

The total costs of a business for differing levels of output are as follows:

Step 1 → Review the cost records from previous periods

Select highest and lowest activity level and associated cost

3: COST BEHAVIOUR

Step 2 → Find the change in cost resulting from the change in output

Step 3 → Calculate the VC/unit

Step 4 → Substitute back into formula of line

2.3 What we have done →

• Plotted a line between the highest and lowest points

• Calculated formula of that line

x

x

3: COST BEHAVIOUR

Using the information calculated in Lecture example 1:

If production next year is expected to be 780 units what would the total cost be?

Workings

Assumptions about cost behaviour

2.4 The assumptions that have been made include the following:

• Within the normal range of output costs are assumed to be either fixed, variable or semi variable

• Variable costs per unit are constant

The following data has been collected from a business:

What are the total fixed cost at production levels below and above 7,000 units?

below 7,000 units and above 7,000 units

What is the variable cost per unit?

$

$

• Cost behaviour is the way in which costs are affected by changes in volume of output

• A fixed cost will be unaffected by an increase or decrease in volume of output

• A step cost is a cost which is fixed in nature within certain volumes of output

• A variable cost is a cost that will vary with output The variable cost per unit is the same amount for each unit produced

• The fixed and variable element of a mixed cost can be determined by the high/low method

4 Formula summary

Total costs = Fixed costs + Variable cost/unit x Output

High/low method:

(1) Find higher and lowest output and cost

(2) Find the difference

(3) Calculate the VC/unit

(4) Substitute to find the FC