CAM

Cost Accounting and Management

→ Definition of management accounting
→ Differences between financial accounting and management accounting
Case study: The participants will be required to complete a short quiz.

→ Manufacturing companies
→ Retailing companies
→ Service companies
Case study: The participants will be required to review a number of anonymous companies’ financial statements extracts and determine which type of company they are.
They will also be required to discuss the differences between these companies.

→ Differences between job order costing and process costing
→ Recording materials and labour costs in a job order costing system
→ Recording overheads in a job order costing system
→ Recording completion and sales of finished goods
→ Adjusting for over/under allocation of overheads
→ Allocating costs in a process costing system
Case study: The participants will be required to review the costs incurred in a manufacturing company and allocate these costs to the jobs and/or processes. They will also be required to justify their decision, discuss the main differences between job order and process costing, and highlight the impact of the costing decisions on profits.

→ The differences between absorption costing and variable costing
→ Treatment of fixed costs under variable costing
→ Treatment of fixed costs under absorption costing
→ Different absorption costing methods available
Case study: The participants will be required to allocate costs using both absorption and variable costing, discuss the differences between these costing methods and the impact on inventory valuation and profits.

→ Preparing a flexible budget for the income statement
→ Preparing an income statement performance report
→ The benefits of standard costing and how to set standards
→ Computing standard cost variances for direct materials and direct labour
→ Analysing manufacturing overheads in a standard costing system
→ Recording transactions at standard cost and preparing a standard cost income statement
Case study: The participants will be required to prepare a flexible budget using standard costing. They will thereafter be required to analyse the variances to actual costs and prepare a report for management as to their impact on profits.

→ What is activity based costing?
→ Identifying the relevant activities
→ Identifying the relevant cost drivers
→ Computing the allocation rates
→ Allocation of indirect costs using ABC
→ Activity Based Management - using ABC to make decisions
Case study: The participants will be required to allocate costs using the activity based costing method, compare to other costing methods for differences in inventory valuation and profits, and thereafter discuss the merits of this costing method.

→ What is a JIT system?
→ Advantages and disadvantages of JIT systems
→ JIT costing
Case study: The participants will be required to discuss the impact on inventory valuation and profits of changing to a JIT system from a traditional production approach, based on financial information provided, and make a recommendation as to whether to adopt this system or not.