ACCA Management Accounting (MA) - OpenTuition

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March-August 2020 ACCA MA/FMA ExamsWatch free MA/FMA lectures1Management Accounting (MA)Formulae 19.20.21.22.23.24.25.26.27.28.29.30.3Accounting for ManagementSources of DataPresenting InformationCost Classification and BehaviourOrdering and Accounting for InventoryInventory ControlAccounting for LabourAccounting for OverheadsThe Management Accountant’s Profit Statement – Absorption CostingThe Management Accountant’s Profit Statement – Marginal CostingProcess Costing – IntroductionProcess Costing – LossesProcess Costing – Work-in-ProgressProcess Costing – Joint ProductsJob, Batch, and Service CostingAlternative Cost AccountingBudgetingBehavioural Aspects of BudgetingSemi-Variable CostsTime Series AnalysisIndex NumbersMeasures of Average and of DispersionThe Normal distributionInterestInvestment AppraisalVariance AnalysisPerformance Measurement OverviewFinancial Performance MeasurementNon-Financial Performance MeasurementDivisional Performance 8185919399103105107113115Answers To Examples117Only on OpenTuition you can find: Free ACCA notes Free ACCA lectures Free ACCA tests Free ACCA tutor support The largest ACCA community

March-August 2020 ACCA MA/FMA ExamsWatch free MA/FMA lectures2Access FREE ACCA ManagementAccounting (MA)/ FIA FMAonline resources on OpenTuition:ACCA MA Lectures (complete course)To fully benefit from these notes you should watch our free MA lecturesACCA MA Practice QuestionsEvery time you have finished studying a chapter of our MA lecture notes,you should come on-line and take a quick testACCA MA FlashcardsPractice key terms and concepts using our MA flashcards!ACCA MA Revision LecturesWatch MA revision lectures working through the past ACCA examquestionsACCA MA Revision Mock ExamCheck how well prepared you are for the MA Exam, and take ourinteractive, computer based Revision MA Exam.ACCA MA ForumsGet help from other studentsAsk MA TutorPost questions to a ACCA tutorvisit https://opentuition.com/acca/ma/Only on OpenTuition you can find: Free ACCA notes Free ACCA lectures Free ACCA tests Free ACCA tutor support The largest ACCA community

March-August 2020 ACCA MA/FMA ExamsWatch free MA/FMA lectures3FORMULAE SHEETFormulae SheetRegression analysisy a bxa b r 𝑦𝑛𝑏 𝑥 𝑛𝑛 𝑥𝑦 𝑥 𝑦𝑛 𝑥 2 ( 𝑥)2𝑛 𝑥𝑦 𝑥 𝑦 (𝑛 𝑥 2 ( 𝑥)2 )(𝑛 𝑦 2 ( 𝑦)2 )Economic order quantity 2𝐶0 𝐷𝐶ℎEconomic batch quantity 𝐶2𝐶0 𝐷𝐷ℎ (1 𝑅 )Arithmetic mean𝑥̅ Ʃ𝑥𝑥̅ 𝑛Ʃ𝑓𝑥Ʃ𝑓(frequency distribution)Standard deviationσ (𝑥 𝑥̅ )2σ 𝑛 𝑓𝑥 2 𝑓 𝑓𝑥 2 ( )𝑓(frequency distribution)Variance σ𝟐Co-efficient of variationCV σ𝑥̅Expected valueEV ƩpxOnly on OpenTuition you can find: Free ACCA notes Free ACCA lectures Free ACCA tests Free ACCA tutor support The largest ACCA community

March-August 2020 ACCA MA/FMA ExamsWatch free MA/FMA lectures4To find the area under the normal curve between the mean and a point Z standard deviations above themean, use the table below. The corresponding area for a point Z standard deviations below the mean canbe found through using symmetry.Z (𝒙 𝝁)𝝈Standard normal distribution Only on OpenTuition you can find: Free ACCA notes Free ACCA lectures Free ACCA tests Free ACCA tutor support The largest ACCA community

March-August 2020 ACCA MA/FMA ExamsWatch free MA/FMA lectures5Present Value TablePresent value of 1 i.e. (1 r)-nWherer discount raten number of periods until paymentDiscount rate 52Only on OpenTuition you can find: Free ACCA notes Free ACCA lectures Free ACCA tests Free ACCA tutor support The largest ACCA community

March-August 2020 ACCA MA/FMA ExamsWatch free MA/FMA lectures6Annuity TablePresent value of an annuity of 1 i.e.Where1 - (1 r)-nrr discount raten number of periodsDiscount rate 5Only on OpenTuition you can find: Free ACCA notes Free ACCA lectures3 Free ACCA tests Free ACCA tutor support The largest ACCA community

March-August 2020 ACCA MA/FMA ExamsWatch free MA/FMA lectures7Chapter 1ACCOUNTING FOR MANAGEMENT1. IntroductionThe purpose of management accounting is to assist management in running the business in waysthat will improve the performance of the business.2. Data and informationOne way of assisting management is to provide them with good information to help them withtheir decisions.The information can be provided to them in different ways, but is usually in the form of reports.For example, a report analysing costs of producing each of several products may assistmanagement in deciding which products to produce.It is the management accountant who will be expected to provide the information, and in orderto do so he/she needs to collect data.Data consists of the facts that are gathered and stored. Data has no clear meaning until it isprocessed – analysed and sorted – into information.3. What makes good information?Good quality information should:๏be Accurate๏be Complete (but not excessive)๏be Cost effective (should cost less than the savings to be made)๏be Understandable (to whoever is using it)๏be Relevant (to the decision being made)๏be Accessible ( i.e. communicated by an appropriate channel (for example, be printed or besent electronically)๏be Timely๏be Easy to useOnly on OpenTuition you can find: Free ACCA notes Free ACCA lectures Free ACCA tests Free ACCA tutor support The largest ACCA community

March-August 2020 ACCA MA/FMA ExamsWatch free MA/FMA lectures84. The main managerial processesThe main areas of management accounting are:๏CostingCost accounting is identifying the cost of producing an item (or providing a service) in orderto, for example, assist in deciding on a selling price.๏Planninge.g. plan how many staff will be required in the factory next year๏Decision makinge.g. decide on what selling price to charge for a new product๏Controle.g. check month-by-month whether the company is over or under spending on wages๏Performance evaluationComparing the performance of mangers or departments against budgets or targets5. The different levels of planning๏strategic planninglong-term plans (e.g. 5 to 10 years) for the businesse.g. what new offices to open? / what new products to launch?๏tactical planningmedium-term, more detailed, plans – usually involving producing budgets for the next yeare.g. how many staff to employ next year?๏operational planningshort-term planning and decisionse.g. which supplier to choose for a purchase next weekOnly on OpenTuition you can find: Free ACCA notes Free ACCA lectures Free ACCA tests Free ACCA tutor support The largest ACCA community

March-August 2020 ACCA MA/FMA ExamsWatch free MA/FMA lectures96. Comparison of management accounting with financialaccountingExample 1Financial AccountingManagement Accounting(Please watch the free lectures that go with these lecture notes in order to fill in the following table)WHEN YOU FINISHED THIS CHAPTER YOU SHOULD ATTEMPT THE ONLINE MA MCQ TESTOnly on OpenTuition you can find: Free ACCA notes Free ACCA lectures Free ACCA tests Free ACCA tutor support The largest ACCA community

March-August 2020 ACCA MA/FMA ExamsWatch free MA/FMA lectures10Only on OpenTuition you can find: Free ACCA notes Free ACCA lectures Free ACCA tests Free ACCA tutor support The largest ACCA community

March-August 2020 ACCA MA/FMA ExamsWatch free MA/FMA lectures11Chapter 2SOURCES OF DATA1. IntroductionThe management accountant needs data in order to be able to process it into information.This chapter lists various sources of data and also various sampling techniques.2. Primary and secondary sources of dataPrimary data are data that have been collected for the specific purpose.Secondary data are data that have been collected for some other purpose but which we then usefor our purposes.3. Internal and external sources dataInternal data are data collected from our own records. These are the main source of primary data.External data are data collected from elsewhere – e.g. the internet, government statistics,financial newspapers. These will be secondary data.4. SamplingIt is common to collect data from a sample rather than from the whole population. Data from thesample are used as representative of the whole population.5. Sampling methodsYou should be aware of the following methods of sampling:๏random samplingEvery item in the population has an equal chance of being selected๏systematic sampling (quasi-random)Select (for example) every 10th item in the populationOnly on OpenTuition you can find: Free ACCA notes Free ACCA lectures Free ACCA tests Free ACCA tutor support The largest ACCA community

March-August 2020 ACCA MA/FMA Exams๏Watch free MA/FMA lectures12stratified sampling (quasi-random)Split the population into groups, and then select at random. For example, if 60% of thepopulation are women and 40% are men, then 60% of the sample should be women and40% men.๏multistage sampling (quasi-random)For example, suppose a company has several thousand purchase invoices filed, filling 20files. Take a random sample of (say) 5 files, and then a random sample of (say) 20 invoicesfrom each of these files.๏cluster sampling (not random)For example, suppose a company has 100 offices through the country, each issuing salesinvoices.Take a random sample of (say) 5 offices and check every invoice at each of these offices.๏quota sampling (not random)Suppose the population is 60% women and 40% men, and that we want to question asample of 200 total. Decide on a quota of 120 women (60%) and 80 men (40%) and thenstop people as they appear until we have the required number of each.6. Big data‘Big data’ are extremely large collections of data that can be analysed to reveal patterns, trends,and associations, especially relating to customers of a business.For example, airlines know where you’ve flown, your preferred seats, cabin class, when you fly,how often you search for a flight before booking, probably which airline you might book withinstead, whether you are returning with them but didn’t fly out with them, whether car hire waspurchased last time, what class of hotel you might book through their site, which routes aregrowing in popularity, seasonality of routes. They also know the profitability of each customer sothat, for example, if a flight is cancelled they can help the most valuable customers first.This information allows airlines to design new routes and timings, match routes to planes andalso to make individualised offers to each potential passenger.WHEN YOU FINISHED THIS CHAPTER YOU SHOULD ATTEMPT THE ONLINE MA MCQ TESTOnly on OpenTuition you can find: Free ACCA notes Free ACCA lectures Free ACCA tests Free ACCA tutor support The largest ACCA community