fundamentals of mgmt accounting (cima exam practice kit) - w. allan (elsevier, 2010)

[...]... activity or item of equipment for which costs are accumulated A cost is a cost which is incurred for an accounting period and which tends to be unaffected by fluctuations in the levels of activity A cost is a cost which changes in total in relation to the level of output An example of a fixed cost is An example of a variable cost is An example of a semi-fixed/semi-variable cost... marginal and so on, in order to be meaningful; • distinguish between the historical cost of an asset and the economic value of an asset to an organisation; • apply first-in-first-out (FIFO), last-in-first-out (LIFO) and average cost (AVCO) methods of accounting for inventory, calculating inventory values and related gross profit; • explain why FIFO is essentially a historical cost method, while LIFO approximates... Under exam conditions choose the number which is easier to calculate 6 1.6 Exam Practice Kit: Fundamentals of Management Accounting Interpolation and Extrapolation (i) When a high-low or graphical method has been used to identify the fixed and variable elements of a cost then this may form the basis for cost estimates at different levels of activity (ii) When the level of activity is within the range of. .. total amount of fixed costs remains unchanged when production volume changes, therefore the unit rate fluctuates 10 1.9 Exam Practice Kit: Fundamentals of Management Accounting D Cost behaviour patterns refer to the way that the cost behaves in relation to the level of activity Therefore options A and B are incorrect Option C describes a non-linear variable cost 1.10 C The best examples of semi-variable... flexible budgeting Budget variances Interpretation and use of budget statements and budget variances Examination Techniques Computer-based examinations Ten Golden Rules 1 Make sure you are familiar with the software before you start exam You cannot speak to the invigilator once you have started 2 These exam practice kits give you plenty of exam style questions to practise 3 Attempt all questions, there... you are advised to try the on-line website demo at www.cimaglobal.com/cba, to both gain familiarity with assessment software and examine the latest style of questions being used Fundamentals of Management Accounting Syllabus outline The syllabus comprises: Topic and study weighting A B C D E Cost Determination Cost Behaviour and Break-even Analysis Standard Costing Cost and Accounting Systems Financial... cost and give an example of one? Cost Behaviour 5 Concepts and definitions solutions 1.1 (i) “Financial accounting is the recording of financial transactions of a firm and a summary of their financial statements within an accounting period for the use of individuals and institutions who wish to analyse and interpret these results (ii) “Cost accounting involves a careful evaluation of the resources... but using other methods For further CBA practice, CIMA Publishing produces CIMA e-success CD-ROMs for all Certificate level subjects These are available at www.cimapublishing.com Fundamentals of Management Accounting and computerbased assessment The assessment for Fundamentals of Management Accounting is a two hour computer-based assessment comprising 50 compulsory questions, with one or more parts Single... fixed and variable elements of a semi-variable cost using the high–low method and ‘line of best fit’ method; • explain the concept of contribution and its use in cost–volume–profit (CVP) analysis; • calculate and interpret the break-even point, profit target, margin of safety and profit–volume ratio for a single product or service; • prepare break-even charts and profit–volume graphs for a single product... line of best fit is drawn by eye between the plotted points The line of best fit is extrapolated back to cross the y axis The point where the extrapolated line cuts the vertical axis can be read off as the fixed element of the cost The variable element of the cost is established by determining the gradient of the line of best fit 1.10 Step cost is a cost which rises in a series of steps, for example, . available at www.cimapublishing.com. Fundamentals of Management Accounting and computer- based assessment The assessment for Fundamentals of Management Accounting is a two hour com- puter-based assessment. papers are: • Fundamentals of Management Accounting • Fundamentals of Financial Accounting • Fundamentals of Business Mathematics • Fundamentals of Business Economics • Fundamentals of Ethics, Corporate. styles within the CBA system and you are advised to try the on-line website demo at www.cimaglobal.com/cba, to both gain familiarity with assessment software and examine the latest style of questions