Session 2-Developments in Management Accounting.pdf - Session 2 Developments in Management Accounting FOCUS This session covers the following content

Session 2-Developments in Management Accounting.pdf -...

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Md. Ashraful Amin Khan - [email protected] F5 Performance Management Becker Professional Education | ACCA Study System FOCUS This session covers the following content from the ACCA Study Guide. (continued on next page)Session 2 Guidance Know the four new management accounting techniques this session introduces; understand the reasons for these techniques and be able to do the calculations. All of the areas are highly examinable.Read the following articlesto strengthen your understanding of this content—it is highly examinable.These articles and all other technical articles relating to this paper are available on the ACCA website: "Environmental Management Accounting" (Dec 2011)"Throughput Accounting and the Theory of Constraints" parts 1 and 2 (Oct, Nov 2011)"Target Costing and Lifecycle Costing" (Feb 2010)Understand the rational behind target costing and be able to discuss ways that businesses can reduce the cost of making products and services (s.2).2. Target costinga) Derive a target cost in manufacturing and service industries.b) Explain the difficulties of using target costing in service industries.c) Suggest how a target cost gap might be closed.3. Life-cycle costinga) Identify the costs involved at different stages of the life cycle.b) Derive a life cycle cost in manufacturing and service industries.c) Identify the benefits of life cycle costing.4. Throughput accountinga) Discuss and apply the theory of constraints.b) Calculate and interpret a throughput accounting ratio (TPAR).c) Suggest how a TPAR could be improved.d) Apply throughput accounting to a multi-product decision-making problem.5. Environmental accountinga) Discuss the issues businesses face in the management of environmental costs.b) Describe the different methods a business may use to account for its environmental costs. Session 2 . A. Specialist Cost and Management Accounting Techniques Developments in Management Accounting
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Md. Ashraful Amin Khan - [email protected] © DeVry/Becker Educational Development Corp. All rights reserved. 2- 1 Session 2 Guidance VISUAL OVERVIEW Objective: To explain the use of specialist management accounting techniques. Understand the meaning of life-cycle costing and be able to calculate a life-cycle cost (s.3 and Illustration 3 ). Appreciate the problem of bottlenecks, and the importance of maximising throughput per bottleneck hour (s.4). Know how to calculate the throughput accounting ratio (s.4). Appreciate the importance of environmental issues and how environmental management accounting can provide information to management. TARGET COSTING • Aim and Use • Steps • Service Industries • Narrowing the Cost Gap ENVIRONMENTAL MANAGEMENT ACCOUNTING • Introduction • Importance • EMA • Environmental Costs • EMA Techniques DEVELOPMENTS IN MANAGEMENT ACCOUNTING • Traditional Management Accounting • Business Environment Changes • Growth of Services Industries • Response of Companies • Response of Management Accountants LIFE-CYCLE COSTING • Product Life Cycle • Costs Involved • Benefits
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