FIA MA1
FIA MA1 Management Information Flashcards
Define an organisation and list typical office departments.
Distinguish a functional organisation structure from a divisional one.
What is decentralisation, and its main benefit and risk?
What functions does a manual of policies, procedures and best practices serve?
Why is effective control over transactions needed, and what three things should every transaction be?
What is segregation of duties and why does it help control?
State the basic principle of double-entry bookkeeping and what a debit/credit each mean.
Give the double entry for (a) a cash sale, (b) paying wages, and (c) a credit purchase of goods for resale.
Name the three ledgers and the five books of prime entry.
Distinguish an integrated accounting system from an interlocking one.
List four advantages of a computerised accounting system, and explain GIGO.
Define the data terms file, record, field, key field and character.
Distinguish transaction data from standing (reference) data.
Distinguish batch processing from real-time, on-line processing.
Describe the input-process-output model of a computerised accounting system.
For a credit sale and a receipt from a credit customer, give the double entries.
Which ledger contains accounts such as rent, electricity, non-current assets, and the receivables/payables control totals?
Name the key people/documents involved in initiating a purchase of raw materials.
Besides segregation of duties, list other internal controls over transactions.
What is a trial balance, and what does it check?
Give the double entry for the purchase of a non-current asset (a car) on credit from a garage.
For what three purposes do managers use management information?
Give the main differences between cost/management accounting and external financial reporting.
Distinguish data from information.
What does the mnemonic ACCURATE stand for (features of good management information)?
Give examples of internal and external sources of information.
Besides internal/external, list ways information can be categorised.
Distinguish primary from secondary information.
Why might non-financial, non-quantitative information be important?
List the limitations of cost and management accounting information.
What is the role of a trainee accountant in a cost and management accounting system?
Give an example of information that is information rather than merely data.
Why do managers at different levels need different information?
What does the 'Cost-beneficial' quality of information mean?
What does 'Authoritative' mean as a feature of good information?
Give an example each of quantitative and qualitative information.
Why must management information be timely?
Why can too much information be a problem (the 'Relevant' quality)?
Outline the stages of the material control cycle.
State the correct sequence of documents in a purchases transaction.
What document shows the amount due to a supplier for goods bought?
What document is raised when goods are received, and what document requests material from stores for production?
What is a bin card and what does it record?
State the formula for free inventory.
There are 120 units on hand, 90 units on order and 40 units allocated to production. What is the free inventory?
Distinguish direct from indirect materials, with examples.
Distinguish direct from indirect labour, with examples.
How is labour time recorded, and what must overtime and wage rates be subject to?
Why is it vital that all despatched goods are invoiced, and how can this be controlled?
Before a customer's order is accepted, what should be checked?
What is a purchase order, and how many copies are typically made?
What is a delivery (despatch) note and how does it differ from an invoice?
Why are periodic stock counts carried out?
Why should a purchase invoice be matched before payment, and to which documents?
Why are coding systems used, and what four benefits do they give?
List the desirable attributes of a coding system.
Describe a sequential (sequence) code and its drawbacks.
Describe a hierarchical (significant digit) code.
Describe block codes and faceted codes.
What is a mnemonic code?
Using this hierarchical code — digit 1 (1=expenses, 2=income, 3=assets, 4=liabilities); digit 2 (1=non-current, 2=current); digit 3 (1=cost, 2=accumulated depreciation); digit 4 (1=property, 2=machinery, 3=office equipment, 4=motor vehicles) — code the accumulated depreciation on cars.
Why is it hard to identify coding errors in a sequence code, and easier in a structured code?
A block code uses 1xxx = expenses, 2xxx = income, 3xxx = assets, 4xxx = liabilities. Which type of account would NOT appear in the statement of financial position?
How do codes assist automatic processing of transactions?
List the main ways in which costs can be classified.
Define a variable cost and give an example.
Define a fixed cost, and what happens to the fixed cost per unit as output rises?
Define a semi-variable (mixed) cost and give an example.
Define a stepped fixed cost and give an example.
What are the three elements of production cost, and how can each be direct or indirect?
Lubricating oil used on a drilling machine to reduce friction - what cost classification is it?
What are non-production overheads?
Define marginal cost, contribution and total absorption cost.
How is the fixed overhead absorption rate per unit calculated?
In marginal costing, how is closing inventory valued, and how are fixed costs treated?
In total absorption costing, how is closing inventory valued?
Why do marginal costing and absorption costing give different profits, and when are they equal?
1,000 units are made (fixed cost $25/unit) and 100 are unsold. By how much does absorption-costing profit exceed marginal-costing profit?
Which costing method must be used for external financial reporting, and which is better for decision-making?
Give the cost build-up: prime cost, factory cost and total cost.
Selling price is $20 and marginal cost is $8. If 500 units are made and sold and fixed overheads are $4,000, what are the contribution and profit?
Why is marginal cost good for decision-making but arguably poor for inventory valuation?
A mail-order company posts every item it sells. Are postage costs fixed, variable, semi-variable or stepped fixed?
What is a cost unit? Give examples.
Define a cost centre and what its manager is responsible for.
Define a profit centre and what its manager is responsible for.
Define an investment centre and what its manager is responsible for.
A manager is responsible for both costs and sales. What kind of centre do they run?
List performance measures appropriate to a cost centre.
State the efficiency ratio and how to interpret a result above 100%.
State the capacity utilisation ratio and interpret a result of 90%.
State the production volume ratio and what a result of 120% tells you about worker efficiency.
Standard hours per unit = 2; planned production 5,000 units; actual production 5,200 units in 10,800 hours. Find the three ratios.
List performance measures appropriate to a profit centre.
Sales $1,800,000; cost of sales $800,000; expenses $320,000. Calculate the gross and net profit percentages.
State the formulae for ROCE and residual income (RI).
Net profit $680,000; capital employed $4,000,000; interest rate 6%. Calculate ROCE and RI.
What assumption underlies a residual income calculation?
Why should managers only be judged on things they control?
In a garage, costs are traced to each car repaired. Are the cars cost units or cost centres?
Why is 'cost compared to budget' on its own an incomplete performance measure for a cost centre?
Distinguish raw materials, work in progress and finished goods.
How is the movement of material through the factory recorded in T-accounts?
What is the double entry to record the issue of raw material to production?
State the formula linking materials purchased to materials used and inventory.
State the formula linking units produced to units sold and finished-goods inventory.
Opening inventory 20,000 units; sales 90,000 units; required closing inventory 10,000 units. How many units must be produced?
Opening raw material 1,000 kg; 5,000 units to be made (3 kg each); required closing raw material 1,500 kg. How many kg must be bought?
Explain the FIFO method of pricing materials issued.
Explain the LIFO method of pricing materials issued.
Explain the cumulative (continuous) weighted average method.
Explain the periodic weighted average method.
Which material pricing method is not permitted for financial reporting?
Give one advantage of FIFO and one of weighted average.
In a period of rising prices, which method gives the highest closing inventory value: FIFO or LIFO?
How are finished goods and WIP valued as material passes through production (per unit)?
List the main remuneration methods for paying employees.
What is the overtime premium, and calculate total pay: 52 hours worked, 40-hour basic week at $10/hour, overtime at time-and-a-half.
How does piecework pay work with a guaranteed minimum? Rate $3/unit, minimum $250/week.
Bonus scheme: basic $9/hour for 40 hours; standard output 120 units; bonus = 50% of time saved paid at time-and-a-third. 150 units made in 40 hours. Total pay?
Define gross pay, net pay and total labour cost to the employer.
Employee works 38 hours at $10/hour. Deductions are 25% of weekly pay above $100; employer payroll tax is 10% of gross. Find gross, net and total paid to the tax authorities.
Under most tax systems, what does the employer actually pay to the employee?
How are labour costs classified as direct or indirect (including overtime premium and idle time)?
What is idle time and how is it treated?
How does the Wages Control account work? (Gross wages $36,000; employee tax $8,000; employer payroll tax $4,000.)
How can improving productivity reduce the labour cost per unit even if hourly rates rise?
Under a PAYE scheme, what does the employer do with the employee's income tax?
Distinguish cost allocation from cost apportionment.
Give suitable bases of apportionment for rent, machine insurance and canteen costs.
What is secondary apportionment (re-apportionment) of service departments?
How is the overhead absorption rate (OAR) calculated, and on what basis?
When would a machine-hour absorption rate be used rather than a labour-hour rate?
Why does over- or under-absorption of overheads arise?
How do you calculate over/under absorption, and how does each affect profit?
Budgeted overheads $12,000; budgeted production 2,000 units. Actual overheads $13,000; actual production 1,900 units. What is the over/under absorption?
Budgeted overheads $50,000; budgeted production 20,000 units. Actual overheads $46,000; actual production 19,000 units. What is the over/under absorption?
If an entire cost can be related to a single department, is it allocated or apportioned?
Outline the three-step process of absorbing overheads into products.
What is job costing and when is it used?
A job needs 20 kg of material at $15/kg and 30 direct labour hours at $9/hour; overheads are absorbed at $4 per labour hour. What is the total absorption cost of the job?
What is batch costing, and how is the cost per unit found?
A batch costs $23,870 in total and produces 900 units. What is the cost per unit?
What is process costing and give two industries that use it.
How is the cost per unit found in a process with a normal loss that has a scrap value?
3,000 kg input costing $9,000; 100 units are normal loss, sold as scrap for $1 each. What is the cost per unit of good output?
What is a normal loss in process costing, and how does it differ from an abnormal loss?
What are equivalent units and why are they needed?
4,600 units are input, total cost $10,000; 4,000 units are completed and 600 are 35% complete. What is the cost per equivalent unit?
2,000 kg input at $5/kg, plus labour $2,400 and overheads $600; a 5% normal loss is sold as scrap at $0.80/kg. What is the cost per good unit?
Distinguish job, batch and process costing in one line each.
How is a cell referenced in a spreadsheet, and what three things can a cell contain?
Why do formulae give spreadsheets their power, and how does a formula start?
What happens to a relative cell reference when a formula is copied?
Cell B2 contains =E6−F10. If it is copied to cell D4, what formula will it contain (relative references)?
What is an absolute cell reference and when is it used?
If E2 = 4, E6 = 9 and G10 = 12, what is the result of =(E6−E2)*E2 − G10/E2?
What do the functions SUM, AVERAGE, ROUND and IF do?
How is a range of cells specified? What cells does G3:J9 cover?
What formula should total the values in cells B2 to F2?
List uses of spreadsheets in management accounting.
List the limitations of spreadsheets.
State the key rules for structuring data in a well-designed spreadsheet.
Distinguish linking from embedding spreadsheet data in another document.
What does ####### in a cell mean, and how is it fixed?
What is a circular reference?
Distinguish Save from Save As.
Give two other common spreadsheet error causes besides a narrow column.
What does the Sort function do?
What does the Filter function do?
What does the RANK function do?
Which chart is most suitable for showing the relative size of a few components of one total (e.g. the split of total cost between labour, material and expenses)?
Which chart is best for showing a trend over time?
What is a bar (or column) chart best used for?
What is a scatter graph (scattergram) used for?
Which function would you use to display sales for only 2 of a company's 8 branches from a listing?
List common formatting features that improve a spreadsheet's usability.
List the main print/page set-up options for a spreadsheet.
Why is 'Print titles' useful for a large worksheet printed over several pages?
What is the purpose of setting a print area?
Which spreadsheet features help when working with a large worksheet on screen?
Card 1 of 181. Question side.