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Unformatted text preview: Lecture 20
Management Accounting Revision Management Accounting Absorption costing Decision making and Contribution Analysis Overheads Budgetary planning Behaviour of costs Break even analysis Contribution income statement Preparation of budgets Budgetary control and variance analysis Investment appraisal Working capital management Section C of exam Select one question from 2 questions Either Chapter 7 and 8 Or Chapter 9 and 10 Costing and decision making Calculations and discussion Remember to use Understand Management Accounting EQL to help your understanding Layout is important Budgeting, Variances and Investment appraisal Make sure you understand the concept of Contribution! Be able to calculate : Contribution per unit Contribution per scarce factor Total Contribution Sales Price Variable Cost per unit Use in Break even analysis Learn all formulae Use in limiting factors decisions Use in relevant costing situations Can you prepare a marginal costing income statement? Can you explain Fixed and Variable costs? Make sure you understand absorption costing... workshop 3 Direct Material (Kg * cost price per kg) ( Hours * rate per hour) (OAR * either Machine hours or Labour hours) Total machine hours or labour hours Can you explain absorption and why we cost this way? Direct Labour Overheads Absorbed OAR= Total overheads per cost centre Cash budgets (why and how and preparation) What are the stages and what are the problems in preparing a master budget? How are budgets used for control purposes? Flexible budget preparation
Variance calculations Price Variance = (APSP) AQ Qty Variance= (SQAQ) SP Statement to reconcile Budgeting and Investment Appraisal... Workshop 4 Class example 2006 exam qn. 5
Snack Coffee Formal 20000 24000 32000 10000 17500 23000 9000 DM+DL+VO H 25500 14000 11500 Total Sales Less V C Total 10000 6500 contribution Less Fixed costs Net Profit Unit contribution and Limiting factors contribution S CB F
Sales DM DL VO Unit contribution Use of labour Hours 5 1 1 0.5 2.5 0.2 4 0.83 1.67 0.42 1.08 0.33 3.27 8 3.75 1 1 2.25 0.2 11.25 Labour/rate Cont/LH Total/ qty Total/qty Contribution 12.50 per labour hour Snack Hours 800 Coffee bar 700 Formal 800 9000 Contribution 10000 2290 (Hours * (800* 12.50 rate) May 06 qn6...Flexible budgets
Budget Flexible 10000 units Budget 12000 units 100000 30000 120000 36000 42000 6000 3000 Actual 12000 units Variance Sales Food costs VOH FC 127200 37200 36000 6000 3100 7200 F 1200A 6000F 0 100A Labour 35000 5000 3000 Investment appraisal Calculate and explain Net Present Value Calculate and explain Accounting Rate of Return and Payback method Advantages and problems Last week's workshop Quiz 4 From 4 pm on 13 March to 6 pm on 14 March 25 questions.... One hour
Make sure you understand workshop 4 material Good luck in quiz Good luck for exam! Make sure you attempt 4 questions on the exam or you will not pass! ...
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This note was uploaded on 04/17/2008 for the course MN 1041 taught by Professor Agyemang during the Spring '08 term at Royal Holloway.
- Spring '08