ACCA F2 Management Accounting

December 2012 Examination

Course presented by:
Graham Cheater CA(Z)
 ACCA F2 Management Accounting November 2012

The Syllabus

A. Nature, source and purpose of

management information
B. Cost accounting techniques
C. Budgeting
D. Standard costing
E. Performance measurement
 ACCA F2 Management Accounting November 2012

The Syllabus
A. Nature, source and purpose of
management information
1. Accounting for management
2. Sources of data
3 Cost classification
4 Presenting information
 ACCA F2 Management Accounting November 2012

The Syllabus
B. Cost accounting techniques

1. Accounting for material, labour and

overheads
2. Absorption and marginal costing
3. Cost accounting methods
4. Alternative cost accounting principles
 ACCA F2 Management Accounting November 2012

The Syllabus

C. Budgeting

1. Nature and purpose of budgeting

2. Statistical techniques
3. Budget preparation
4. Flexible budgets
5 Capital budgeting and discounted cash flow
6 Budgetary control and reporting
7. Behavioural aspects of budgeting
 ACCA F2 Management Accounting November 2012

The Syllabus
D. Standard costing

1. Standard costing system

2. Variance calculations and analysis
3. Reconciliation of budgeted and
actual profit
 ACCA F2 Management Accounting November 2012

The Syllabus
E. Performance measurement

1. Performance measurement - overview

2 Performance measurement - application
3 Cost reductions and value enhancement
4. Monitoring performance and reporting
 ACCA F2 Management Accounting November 2012

The Examinations
- two hour examination
- questions will assess all parts of the
syllabus
- questions will test knowledge and
comprehension or application of
this knowledge
- examination will consist of two 50
mark questions.
 ACCA F2 Management Accounting November 2012

Tonight
A. Nature, source and purpose of
management information

1. Accounting for management

2. Sources of data
Next Week
3 Cost classification
4 Presenting information
 ACCA F2 Management Accounting November 2012

ACCOUNTING FOR MANAGEMENT

a) Purpose and role of cost and management accounting
b) Financial accounting compared to cost and management
accounting
c) Managerial processes of planning, decision-making and
control
d) Difference between strategic, tactical and operational
planning
e) Data versus information
f) Attributes of good information
g) Limitations of management information in providing
guidance for managerial decision-making
 ACCA F2 Management Accounting November 2012

ACCOUNTING FOR
MANAGEMENT
a) Purpose and role of cost and
management accounting:
- to assist management in running the
business
- by providing good information
- usually in the form of reports
- so as to improve the performance of
the business
 ACCA F2 Management Accounting November 2012

DATA, INFORMATION, AND DECISION-MAKING

Decision-making requires information

Information requires data

Data must be collected

Therefore the management accountant

must collect data to analyse and convert
to information for reporting.
 ACCA F2 Management Accounting November 2012

DATA, INFORMATION, AND DECISION-MAKING

Attributes of good quality information:

- have a purpose
- be relevant to the purpose
- be understandable
- be timely
- be accurate
- be complete
- communicated to the right person
- communicated through the right channels
 ACCA F2 Management Accounting November 2012

Financial accounting (finacc)

Cost and management accounting (manacc)
- finacc
- once per year
- prescribed layout
- historical,
- external and internal
users,
- actual and accrued
income, expenses
versus
manacc
monthly or when required
depends on report
historical, current, especially future
purely internal users;
income, expenses, quantities
 ACCA F2 Management Accounting November 2012

SOURCES OF DATA

Primary and secondary

Internal and external

Financial and non-financial

Complete or sampled

Other?
 ACCA F2 Management Accounting November 2012
Managerial processes: planning, decision-making, control

- Planning: considering what you want your future to be;

- * strategic or long-term
- * tactical or medium-term
- * operational or short-term

- Decision-making: considering what was and is and what to do

about it;

- Control: setting targets, parameters, performance and managing

resources to achieve these
ACCA F2 Management Accounting
December 2012 Examination
Course presented by:
Graham Cheater CA(Z)
 ACCA F2 Management Accounting November 2012

The Syllabus

A. Nature, source and purpose of

management information
B. Cost accounting techniques
C. Budgeting
D. Standard costing
E. Performance measurement
 ACCA F2 Management Accounting November 2012

The Syllabus
A. Nature, source and purpose of
management information
1. Accounting for management
2. Sources of data
TONIGHT:
3 Cost classification
4 Presenting information
 ACCA F2 Management Accounting November 2012

3. Cost classification
a) Production and non-production costs
b) Elements of non-production costs: administrative,
selling, distribution and finance
c) Elements of production costs: materials, labour and
overheads
d) Explain the importance of the distinction between
production and non-production costs when valuing
output and inventories
e) Classifications used in analysis of product/service costs:
- by function,
- direct and indirect,
- fixed and variable,
- stepped, fixed, and semi variable costs
 ACCA F2 Management Accounting November 2012

3. Cost classification (continued)

f) Use of codes in categorising transactions
g) Describe and illustrate, graphically, different types of cost
behaviour
h) Use high/low analysis to separate the fixed and variable
elements of total costs including situations involving semi-
variable and stepped fixed costs and changes in the variable
cost per unit
i) Linear functions and equations
j) Cost objects, cost units and cost centres
k) Responsibility ‘centres’: cost, profit, investment, and revenue
centres
l) Differing needs for information of cost, profit, investment
and revenue centre managers
 ACCA F2 Management Accounting November 2012

4. Presenting information
a) Prepare written reports representing
management information in suitable formats
according to purpose
b) Present information using tables, charts and
graphs (bar charts, line graphs, pie charts
and scatter graphs)
c) Interprete information (including the above
tables, charts and graphs) presented
in management reports
 ACCA F2 Management Accounting November 2012

• Questions?

• Comments?
ACCA F2 Management Accounting November 2012