1.Cost concepts and cost allocation
1.Understand cost classifications used
- for assigning cost to cost objects
- to prepare financial statements.
- to predict cost behaviours.
- in decision making.
2.Prepare Income statement for manufacturing and service organizations.
- Describe the basic difference between Job-Order costing and Process costing.
- Identify the types of firms that would use Job-Order and Process Costing.
- Describe the cost flow associated with each costing system.
- Understand how to handle underapplied and overapplied overheads under each costing system.
- Apply knowledge of job order costing and process costing to calculate per unit cost.
- Prepare process cost report using weighted average and FIFO method.
- Demonstrate knowledge of handling normal and abnormal spoilage in process costing.
3.Activity based product costing
- Understand Activity Based Costing and its difference from a traditional costing system.
- Demonstrate knowledge of assigning cost to cost pools and computing activity rates.
- Application of Activity Based Costing to calculate Product and Customer margins.
- Explain how changes in activity level affect contribution margin and net operating income.
- Define cost-volume-profit analysis and how managers use it as a tool for planning and control.
- Define Breakeven point and use contribution margin to determine breakeven point for multiple products.
- Use Cost-Volume-profit analysis to estimate profitability of various products and services.
5.Segment reporting, transfer pricing and ROI
- Explain difference between absorption and variable costing.
- Prepare segmented income statement.
- Explain and calculate Residual Income and Economic Value Added.
- Demonstrate knowledge of transfer pricing.
- Define and calculate Return on Investment.
6.Budgeting for planning and control
- Define budget. Discuss its role in planning, decision making and control.
- Identify the major components of a master budget.
- Demonstrate understanding and apply knowledge to prepare operating budgets.
- Understand flexible budgeting and apply knowledge to prepare performance report.
- Prepare budgeted Income statement, Balance sheet and a schedule of Cash Budget.
7.Standard costing and variance analysis
- Define standard cost and explain how to compute standard cost per unit.
- Explain how managers use variance analysis to control costs.
- Apply standard cost knowledge to compute Material, Labour and Overhead variances.
- Explain how variance analysis is used to evaluate performance of managers.
- Identify relevant and irrelevant costs and benefits in tactical decision making.
- Apply differential analysis in a variety of business situations, such as:
- a product line of business segment should be added or dropped.
- make or buy decision.
- a special order should be accepted or rejected.
- a joint product should be sold at split-off point or processed further.
- Perform differential analysis for sales mix decision that involves constrained resources.
- Define capital budgeting decisions.
- Demonstrate understanding of measured used in capital investment decisions.
- Evaluate capital investment proposals using Payback period, Internal rate return, Net present value and Profitability Index.
- Apply knowledge to rank investment projects in order of preference.
10.Target costing and pricing decisions
- Define why managers use various pricing approaches.
- Define the concept of economic pricing and explain total revenue and total cost curves.
- Demonstrate knowledge of cost-based pricing techniques.
- Understand pricing based on target costing.
11. Financial statement analysis
- Describe what analytical tools are available to measure financial performance.
- Demonstrate thorough understanding of horizontal and vertical analysis, trend and ratio analysis.