Thông tin tài liệu
CIMA Paper P1 Management Accounting Study Text Published by: Kaplan Publishing UK Unit 2 The Business Centre, Molly Millars Lane, Wokingham, Berkshire RG41 2QZ Copyright © 2015 Kaplan Financial Limited. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. Acknowledgements We are grateful to the CIMA for permission to reproduce past examination questions. The answers to CIMA Exams have been prepared by Kaplan Publishing, except in the case of the CIMA November 2010 and subsequent CIMA Exam answers where the official CIMA answers have been reproduced. Notice The text in this material and any others made available by any Kaplan Group company does not amount to advice on a particular matter and should not be taken as such. No reliance should be placed on the content as the basis for any investment or other decision or in connection with any advice given to third parties. Please consult your appropriate professional adviser as necessary. Kaplan Publishing Limited and all other Kaplan group companies expressly disclaim all liability to any person in respect of any losses or other claims, whether direct, indirect, incidental, consequential or otherwise arising in relation to the use of such materials. Kaplan is not responsible for the content of external websites. The inclusion of a link to a third party website in this text should not be taken as an endorsement. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library. ISBN: 9781784152994 Printed and bound in Great Britain. ii Contents Page Chapter Traditional costing Chapter Activitybased costing 47 Chapter Other costing techniques 81 Chapter The modern manufacturing environment and the 127 importance of quality Chapter Breakeven analysis 167 Chapter Relevant costs and decision making 223 Chapter Linear programming 275 Chapter Variance analysis: calculations 307 Chapter Variance analysis: discussion elements 393 Chapter 10 Advanced variances 415 Chapter 11 The budgeting framework 481 Chapter 12 Budgetary control 535 Chapter 13 Forecasting techniques 575 Chapter 14 The treatment of uncertainty and risk in decision 615 making iii iv chapter Intro Introduction v How to use the materials These official CIMA learning materials have been carefully designed to make your learning experience as easy as possible and to give you the best chances of success in your Objective Test Examination. The product range contains a number of features to help you in the study process. They include: • • • a detailed explanation of all syllabus areas extensive ‘practical’ materials generous question practice, together with full solutions This Study Text has been designed with the needs of home study and distance learning candidates in mind. Such students require very full coverage of the syllabus topics, and also the facility to undertake extensive question practice. However, the Study Text is also ideal for fully taught courses. The main body of the text is divided into a number of chapters, each of which is organised on the following pattern: vi • Detailed learning outcomes. These describe the knowledge expected after your studies of the chapter are complete. You should assimilate these before beginning detailed work on the chapter, so that you can appreciate where your studies are leading • Stepbystep topic coverage. This is the heart of each chapter, containing detailed explanatory text supported where appropriate by worked examples and exercises. You should work carefully through this section, ensuring that you understand the material being explained and can tackle the examples and exercises successfully. Remember that in many cases knowledge is cumulative: if you fail to digest earlier material thoroughly, you may struggle to understand later chapters • Activities. Some chapters are illustrated by more practical elements, such as comments and questions designed to stimulate discussion • • Question practice. The text contains three styles of question: – Examstyle objective test questions (OTQs) – ‘Integration’ questions – these test your ability to understand topics within a wider context. This is particularly important with calculations where OTQs may focus on just one element but an integration question tackles the full calculation, just as you would be expected to do in the workplace – ‘Case’ style questions – these test your ability to analyse and discuss issues in greater depth, particularly focusing on scenarios that are less clear cut than in the Objective Test Examination, and thus provide excellent practice for developing the skills needed for success in the Operational Level Case Study Examination Solutions. Avoid the temptation merely to ‘audit’ the solutions provided. It is an illusion to think that this provides the same benefits as you would gain from a serious attempt of your own. However, if you are struggling to get started on a question you should read the introductory guidance provided at the beginning of the solution, where provided, and then make your own attempt before referring back to the full solution If you work conscientiously through this Official CIMA Study Text according to the guidelines above you will be giving yourself an excellent chance of success in your Objective Test Examination. Good luck with your studies! Quality and accuracy are of the utmost importance to us so if you spot an error in any of our products, please send an email to mykaplanreporting@kaplan.com with full details, or follow the link to the feedback form in MyKaplan. Our Quality Coordinator will work with our technical team to verify the error and take action to ensure it is corrected in future editions. Icon Explanations Definition – These sections explain important areas of knowledge which must be understood and reproduced in an assessment environment Key point – Identifies topics which are key to success and are often examined. Supplementary reading – These sections will help to provide a deeper understanding of core areas. The supplementary reading is NOT optional reading. It is vital to provide you with the breadth of knowledge you will need to address the wide range of topics within your syllabus that could feature in an assessment question Reference to this text is vital when self studying Test your understanding – Following key points and definitions are exercises which give the opportunity to assess the understanding of these core areas vii Illustration – To help develop an understanding of particular topics. The illustrative examples are useful in preparing for the Test your understanding exercises. Exclamation mark – This symbol signifies a topic which can be more difficult to understand. When reviewing these areas, care should be taken Study technique Passing exams is partly a matter of intellectual ability, but however accomplished you are in that respect you can improve your chances significantly by the use of appropriate study and revision techniques. In this section we briefly outline some tips for effective study during the earlier stages of your approach to the Objective Test Examination. We also mention some techniques that you will find useful at the revision stage. Planning To begin with, formal planning is essential to get the best return from the time you spend studying. Estimate how much time in total you are going to need for each subject you are studying. Remember that you need to allow time for revision as well as for initial study of the material. With your study material before you, decide which chapters you are going to study in each week, and which weeks you will devote to revision and final question practice. Prepare a written schedule summarising the above and stick to it! It is essential to know your syllabus. As your studies progress you will become more familiar with how long it takes to cover topics in sufficient depth. Your timetable may need to be adapted to allocate enough time for the whole syllabus. Students are advised to refer to the notice of examinable legislation published regularly in CIMA’s magazine (Financial Management), the students enewsletter (Velocity) and on the CIMA website, to ensure they are uptodate. The amount of space allocated to a topic in the Study Text is not a very good guide as to how long it will take you. The syllabus weighting is the better guide as to how long you should spend on a syllabus topic. Tips for effective studying (1) Aim to find a quiet and undisturbed location for your study, and plan as far as possible to use the same period of time each day. Getting into a routine helps to avoid wasting time. Make sure that you have all the materials you need before you begin so as to minimise interruptions viii (2) Store all your materials in one place, so that you do not waste time searching for items every time you want to begin studying. If you have to pack everything away after each study period, keep your study materials in a box, or even a suitcase, which will not be disturbed until the next time (3) Limit distractions. To make the most effective use of your study periods you should be able to apply total concentration, so turn off all entertainment equipment, set your phones to message mode, and put up your ‘do not disturb’ sign (4) Your timetable will tell you which topic to study. However, before diving in and becoming engrossed in the finer points, make sure you have an overall picture of all the areas that need to be covered by the end of that session. After an hour, allow yourself a short break and move away from your Study Text. With experience, you will learn to assess the pace you need to work at. Each study session should focus on component learning outcomes – the basis for all questions (5) Work carefully through a chapter, making notes as you go. When you have covered a suitable amount of material, vary the pattern by attempting a practice question. When you have finished your attempt, make notes of any mistakes you made, or any areas that you failed to cover or covered more briefly. Be aware that all component learning outcomes will be tested in each examination (6) Make notes as you study, and discover the techniques that work best for you. Your notes may be in the form of lists, bullet points, diagrams, summaries, ‘mind maps’, or the written word, but remember that you will need to refer back to them at a later date, so they must be intelligible. If you are on a taught course, make sure you highlight any issues you would like to follow up with your lecturer (7) Organise your notes. Make sure that all your notes, calculations etc. can be effectively filed and easily retrieved later Objective Test Objective Test questions require you to choose or provide a response to a question whose correct answer is predetermined. The most common types of Objective Test question you will see are: • Multiple choice, where you have to choose the correct answer(s) from a list of possible answers. This could either be numbers or text • Multiple choice with more choices and answers, for example, choosing two correct answers from a list of eight possible answers. This could either be numbers or text • Single numeric entry, where you give your numeric answer, for example, profit is $10,000 • Multiple entry, where you give several numeric answers ix • True/false questions, where you state whether a statement is true or false • Matching pairs of text, for example, matching a technical term with the correct definition • Other types could be matching text with graphs and labelling graphs/diagrams In every chapter of this Study Text we have introduced these types of questions, but obviously we have had to label answers A, B, C etc rather than using click boxes. For convenience we have retained quite a few questions where an initial scenario leads to a number of subquestions. There will be questions of this type in the Objective Test Examination but they will rarely have more than three subquestions. Guidance re CIMA onscreen calculator As part of the CIMA Objective Test software, candidates are now provided with a calculator. This calculator is onscreen and is available for the duration of the assessment. The calculator is available in each of the Objective Test Examinations and is accessed by clicking the calculator button in the top left hand corner of the screen at any time during the assessment. All candidates must complete a 15minute tutorial before the assessment begins and will have the opportunity to familiarise themselves with the calculator and practise using it. Candidates may practise using the calculator by downloading and installing the practice exam at www.pearsonvue.com/cima/practiceexams/. Fundamentals of Objective Tests The Objective Tests are 90minute assessments comprising 60 compulsory questions, with one or more parts. There will be no choice and all questions should be attempted. Structure of subjects and learning outcomes Each subject within the syllabus is divided into a number of broad syllabus topics. The topics contain one or more lead learning outcomes, related component learning outcomes and indicative knowledge content. A learning outcome has two main purposes: (a) To define the skill or ability that a well prepared candidate should be able to exhibit in the examination. (b) To demonstrate the approach likely to be taken in examination questions. x Traditional costing Test your understanding answers Example Standard cost card Direct materials per unit Direct labour per unit Variable overheads Production overhead per unit (note) 3 kgs × $4/kg 2 hrs × $22/hr 2 hrs × $6/hr Full/absorption cost per unit $ 12 44 12 20 — 88 — Note: Production overhead per unit in the standard cost card should be based on budgeted production. Therefore in this example they will be ($400,000/20,000 units =) $20 per unit. Inventory valuation If 16,000 units were produced and 14,000 units sold then there will be 2,000 units in closing inventory. Valuing that inventory at the absorption cost will give a value of = 2,000 × $88 = $176,000 32 chapter Example Standard cost card Direct materials per unit Direct labour per unit Variable overheads 3 kgs × $4/kg 2 hrs × $22/hr 2 hrs × $6/hr Marginal cost per unit $ 12 44 12 — 68 — Note: Fixed production overhead is not included in a marginal costing standard cost card. Inventory valuation Valuing that inventory at the marginal cost will give a value of = 2,000 × $68 = $136,000 Example (a) (i) $ Sales 1,000 units × $50 Direct materials Direct labour Variable overheads 1,000 units × $15 1,000 units × $10 1,000 units × $5 Fixed overheads $ 50,000 15,000 10,000 5,000 5,000 –––––– 35,000 Profit –––––– 15,000 –––––– 33 Traditional costing (ii) Profit per unit = $15000 ––––––– 1,000 units = 15/unit (b) (i) Contribution per unit = $50 – ($15 + $10 + $5) = (ii) Total contribution = $20/unit × 1,000 units = (iii) Contribution $20/unit × 1,000 units Fixed cost Profit $20 $20,000 $ 20,000 5,000 –––––– 15,000 –––––– The two systems give the same profit provided there is no change in inventory. Example Either marginal costing or absorption costing principles can be used. The two systems will give the same profit as there is no change in inventory (production = sales). Marginal costing will be simpler and is illustrated first. $ Contribution $20 per unit × 3,000 units Fixed cost Profit 34 60,000 5,000 –––––– 55,000 –––––– chapter Alternatively: $ Sales Direct materials 3,000 units × $50 3,000 units × $15 45,000 Direct labour Variable overheads Fixed overheads 3,000 units × $10 30,000 3,000 units × $5 15,000 3,000 units × $5 15,000 $ 150,000 ––––– (105,000) Overabsorption of fixed overheads ($15,000 – $5,000) 10,000 –––––– 55,000 –––––– Notice that we did not use the $15 per unit profit figure. Unlike contribution per unit, profit per unit is not constant. Example B A common shortcut in multiple choice questions is to calculate the marginal costing profit and then use the reconciliation of profits to get to the absorption costing profit. First of all – the profit under marginal costing: Contribution per unit = $15 – (3.50 + 4.00 + 2.00) = $5.50 No of units sold = 2,400 – 180 = 2,220 $ Contribution $5.50/unit × 2,220 units Fixed cost $60,000 p.a./12 months 12,210 5,000 ––––– 7,210 ––––– 35 Traditional costing As production is greater than sales, absorption costing will show the higher profit. Difference in profit = change in inventory × fixed production overhead per unit. Difference in profit = 180 units × $2/unit = $360. Therefore, profit reported under absorption costing = $7,210 + 360 = $7,570. Budgeted overheads The FOAR was worked out as $60,000 ––––––––––––––– = –––––– = $2 per unit Budgeted level of activity 30,000 units Example The selling price is calculated as follows: Direct material cost Direct labour cost Total direct cost Production overhead absorbed (4 hours × $16) Total production cost Markup for nonproduction costs (8% × $140) Full cost Profit markup (see working) Selling price $ per unit 62.00 14.00 ——— 76.00 64.00 ——— 140.00 11.20 ——— 151.20 48.00 ——— 199.20 ——— Working: Target return on investment in product B = $400,000 × 12% = $48,000 Target return per unit of product B = $48,000/1,000 units = $48 36 chapter Test your understanding As mentioned, it is relatively easy to complete the first two lines of the cost card. The difficult part is calculating the production overhead per unit, so let’s start by considering this. We need to absorb the overheads into units of production. To do this, we will first need to calculate an overhead absorption rate (OAR): Production overhead (this is $80,000, as per the question) OAR = ————————— Activity level (this must be chosen) The activity level must be appropriate for the business. Saturn must choose between three activity levels: • Units of production – This would not be appropriate since Saturn produces more than one type of product. It would not be fair to absorb the same amount of overhead into each product • Machine hours or labour hours – It is fair to absorb production overheads into the products based on the labour or machine hours taken to produce each unit. We must decide if the most appropriate activity level is machine or labour hours. To do this we can look at the nature of the process. Production appears to be more machine intensive than labour intensive because each unit takes more machine hours to produce than it does labour hours. Therefore, the most appropriate activity level is machine hours Working – OAR OAR = $80,000 production overhead ——————————————————————— (0.01 × 500k) + (0.04 × 150k) + (0.02 × 250k) hours = $80,000 —————— 16,000 hours = $5 per machine hour 37 Traditional costing We can now absorb these into the units of production: Production overheads ($) = machine hours per unit × $5 Sky Bar Moon Egg Sun Bar 0.05 0.20 0.10 This is the difficult part done. We can now quickly complete the cost card and answer the question: Direct labour cost per unit Direct material cost per unit Production overhead per unit Full production cost per unit Selling price per unit Profit/ (loss) per unit Sky Moon Bar Egg $ $ 0.07 0.14 0.17 0.19 0.05 0.20 0.29 0.53 0.50 0.45 0.21 (0.08) Sun Bar $ 0.12 0.16 0.10 0.38 0.43 0.05 Outcome of absorption costing Based on absorption costing, the Sky Bar and the Sun Bar are both profitable. However, the Moon Egg is loss making. Managers would need to consider the future of the Moon Egg. They may look at the possibility of increasing the selling price and/or reducing costs. If this is not possible, they may make the decision to stop selling the product. However, this may prove to be the wrong decision because absorption costing does not always result in an accurate calculation of the full production cost per unit. ABC can be a more accurate method of calculating the full production cost per unit and as a result should lead to better decisions. ABC is explored in the next chapter. 38 chapter Test your understanding D The easiest way to answer this question is to make up a number for sales, say $1,000, then the relationships will be much easier to visualise. If sales = $1,000, then: Variable cost = 60% × $1,000 = $600 Current situation Sales Variable cost Contribution $ 1,000 600 –––– 400 –––– New situation Sales (10% higher) Variable cost Contribution $ 1,100 600 –––– 500 –––– Contribution increases by $100, which is an increase of 25% on its original value. Fixed cost should be ignored as it does not affect contribution. Test your understanding B 39 Traditional costing Test your understanding B Production is greater than sales, so absorption costing will have the higher profit. Difference in profit = change in inventory × fixed production overhead per unit. Difference in profit = 2,500 units × $8/unit = $20,000. Therefore, profit reported under marginal costing = $42,000 – 20,000 = $22,000. Test your understanding (a) (i) March $ $ 52,500 Sales Cost of sales 0 Op. stock (W1) Production costs (@$20/unit) 40,000 ——— 40,000 Less cl. inventory (@$20/unit) (W2) 10,000 ——— Net Profit/Loss 40 10,000 64,000 ——— 74,000 14,000 ——— 30,000 ——— 22,500 (5,000) ——— 17,500 (Under)/overabsorption (W3) Gross profit Selling etc costs Fixed (W4) Variable April $ $ 105,000 10,000 7,875 ——— 60,000 ——— 45,000 1,000 ——— 46,000 10,000 15,750 ——— 17,875 ——— (375) ——— 25,750 ——— 20,250 ——— chapter (ii) Sales Variable cost of sales Op. inventory (W1) Variable production costs (@$15/unit) March $ $ 52,500 April $ $ 105,000 0 30,000 7,500 48,000 ––––– 30,000 Less cl. inventory (@$15/unit) (W2) 7,500 ––––– ––––– 55,500 10,500 22,500 ––––– 30,000 7,875 ––––– 22,125 ––––– 45,000 ––––– 60,000 15,750 ––––– 44,250 15,000 10,000 ––––– 25,000 ––––– (2,875) ––––– 25,000 ––––– 19,250 ––––– Variable selling etc costs Contribution Fixed costs Production Selling etc Profit/Loss 15,000 10,000 ––––– Workings (W1) The closing inventory for March becomes the opening stock for April (W2) March April Units Units Op. inventory 0 500 Production 2,000 3,200 –––– –––– 2,000 3,700 Less sales 1,500 3,000 –––– –––– Cl. inventory 500 700 41 Traditional costing (W3) Under/overabsorption is the difference between overheads incurred and overheads absorbed. “Overheads incurred” means actual overheads and we are told that the actual fixed overheads were as expected. Therefore the actual fixed overheads incurred are the same as the budgeted fixed overheads. Budgeted fixed overhead = $5 per unit × 36,000 units = $180,000per annum ữ12 = 15,000permonth March Overheadsincurred Overheadsabsorbed $5/unitì2,000units Underabsorption April Overheads incurred Overheads absorbed $5/unit × 3,200 units Overabsorption 15,000 10,000 ––––– (5,000) ––––– 15,000 16,000 ––––– 1,000 ––––– (W4) Selling, etc fixed overhead = $120,000/12 = $10,000 per month. (b) If there is no change in inventory, the 2 systems give the same profit. If production is greater than sales then absorption costing shows the higher profit Difference in profit = change in inventory × fixed production overhead cost per unit 42 chapter In both March and April, production is greater than sales and thus absorption costing will show the higher profit (the smaller loss in March). Marginal costing profit/loss Difference in profit (2,000 – 1,500) × $5 per unit (3,200 – 3,000) × $5 per unit Absorption costing profit/loss March (2,875) April 19,250 2,500 ––––– (375) ––––– 1,000 –––––– 20,250 –––––– This difference occurs because marginal costing writes off the entire fixed overhead in the period incurred, whereas absorption costing carries forward some fixed production overhead into the next period in the valuation of closing inventory. Test your understanding Missing word: lower Marginal costing values inventory at a lower amount because it does not include fixed overheads in the valuation. Therefore as inventory levels increase the value of closing inventory under marginal costing will be lower. This will give a higher cost of sales and a lower profit. Test your understanding D Underabsorption occurs when the amount absorbed is less than the actual overheads incurred. 43 Traditional costing Test your understanding The overabsorbed fixed production overheads for the year were $65,000. $450,000 Absorption rate = ––––––– = $0.50/hour 900,000 Absorbed overheads 60,000 units × 18 hrs/unit × $0.50/hour Actual overheads = $475,000 Overabsorption = $65,000 = $540,000 Test your understanding (a) The variable cost per unit of product R is $36.00 per unit Direct material $14 + direct labour $19 + variable overhead $3 = $36. (b) The total (full) cost of product R is $124.00 per unit Variable cost $36 + fixed overhead (8 hours × $11) = $124. (c) The selling price of product R which will achieve the specified return on investment is $147.68 per unit Working: Required return from investment in product R = $600,000 × 15% = $90,000 Required return per unit sold = $90,000/3,800 units = $23.68 Required selling price = $124.00 full cost + $23.68 = $147.68 44 chapter Test your understanding 10 The costplus selling price of one unit of product Y should be $24.80. Required annual return = $800,000 × 18% = $144,000 Return as a percentage of total cost =144,000/$600,000 = 24% Required costplus selling price = $20 + (24% + $20) = $24.80 Test your understanding 11 [Make sure that you focus your answer on absorption and marginal cost approaches to pricing (not costing). A main issue is therefore how the level of markup is determined. Your answer should take a balanced view of the comment in the short and long term. While it may be true in the short term, under certain circumstances a price which does not generate a profit in the long term could not be acceptable.] (a) An absorption cost approach to pricing involves adding a profit margin to the full cost of the product. The full cost is calculated by taking prime cost and adding a share of overhead which, in ML’s case, is absorbed using machine hours A marginal cost approach to pricing takes the variable cost of the product and adds a markup to cover fixed cost and profit. Fixed overheads are not absorbed to product but are treated as a period cost in the accounts. The markup added using a marginal costing approach would have to be greater than that under an absorption costing approach to ensure that the same profit level is achieved. Markups may be varied depending on the market conditions. ML’s work is unique to each of its customers and it may therefore be difficult to estimate a suitable markup. 45 Traditional costing (b) The comment ‘any price that exceeds variable costs is better than no work’ may have some validity in the short term. In the case of a company like ML, which has unused capacity, fixed costs will be incurred in the short term irrespective of workload, i.e. the fixed costs will not change as no extra capacity is required (for example, premises will not have to be expanded in order to accommodate the extra production), and they can therefore be ignored for decision making purposes. Any price that exceeds variable cost will provide some contribution and will reduce losses Care must be taken that special prices based on variable cost do not become the normal expectation or upset existing customers who are paying a price which generates a profit. In the long run fixed cost must be covered and a profit made in accordance with company objectives. An absorption costing approach may not provide an accurate total product costs and an activitybased approach may improve the accuracy of total costs and enable ML to identify those products or customers which generate most profit. If resources are scarce (i.e. they cannot easily be obtained at the prices or rates contained in the standard cost card) then this statement is not true, even in the short term, as scarce resources typically cost a premium and the marginal cost will increase. This concept will be explored in the decision making chapter later in the text. 46 ... 16 17 18 19 20 14 . 718 15 .562 16 .398 17 .226 18 .046 13 .578 14 .292 14 .992 15 .679 16 .3 51 12.5 61 13 .16 6 13 .754 14 .324 14 .878 11 .652 12 .16 6 12 .659 13 .13 4 13 .590 10 .838 11 .274 11 .690 12 .085 12 .462 10 .10 6... 6.247 6. 710 4.486 5.033 5.535 5.995 6. 418 4.355 4.868 5.335 5.759 6 .14 5 11 12 13 14 15 10 .368 11 .255 12 .13 4 13 .004 13 .865 9.787 10 .575 11 .348 12 .10 6 12 .849 9.253 9.954 10 .635 11 .296 11 .938 8.760... 0.2 31 0. 212 0 .19 4 0 .17 8 10 % 0.909 0.826 0.7 51 0.683 0.6 21 0.564 0. 513 0.467 0.424 0.386 0.350 0. 319 0.290 0.263 0.239 0. 218 0 .19 8 0 .18 0 0 .16 4 0 .14 9 Periods (n) 10 11 12 13 14 15 16 17 18 19 20 11 %
Ngày đăng: 09/01/2019, 14:39
Xem thêm: CIMA paper 1 management accounting study text
