ACCA MA
ACCA Management Accounting (MA) Flashcards
What is the purpose of management accounting?
What are the attributes of good information?
What is the difference between data and information?
What are the purposes of costing (i.e. calculating the cost of producing a product or service)?
State three ways in which management accounting differs from financial accounting.
Distinguish between strategic, tactical and operational planning by who prepares it and its time horizon.
What are the three stages of the management control cycle?
Distinguish between feedback control and feedforward control.
When sampling, what is meant by a ‘sampling frame’?
What is meant by ‘random sampling’?
What is meant by ‘systematic sampling’?
What is meant by ‘quota sampling’?
Distinguish between primary and secondary data, giving an example of each.
What is stratified sampling?
What is cluster sampling and what is its main weakness?
What is multistage sampling?
What is meant by a ‘line of best fit’?
Describe a ‘pie chart’?
In a simple bar chart, what does the height of each bar represent, and what must be true of the vertical axis?
Distinguish between a component (stacked) bar chart and a percentage component bar chart.
What is a multiple (compound) bar chart used for?
What is a scatter diagram used for?
What are ‘direct costs’?
What is the ‘prime cost’ of a unit of production?
What is meant by 'indirect costs (or overheads)'?
What is a ‘variable cost’?
What is a ‘fixed cost’?
What is a ‘stepped fixed cost’?
What is a ‘semi-variable cost’?
What is meant by a ‘cost unit’?
What is meant by a ‘cost centre’?
What is a ‘purchase requisition form’?
What is a ‘delivery note’?
What is meant by the FIFO method of valuing inventory?
Which of the following methods of inventory valuation are acceptable under IAS 2 for financial reporting: FIFO, LIFO, or weighted average cost?
What is a goods received note (GRN) and what is it used for?
What is a materials requisition note?
Under the weighted average (AVCO) method, when is a new average cost per unit calculated?
How does AVCO value issues and closing inventory, and when is the average recalculated?
In the formula on the formula sheet for the Economic Order Quantity, what does the symbol Co represent?
In the formula on the formula sheet for the Economic Order Quantity, what does the symbol D represent?
In the formula on the formula sheet for the Economic Order Quantity, what does the symbol Ch represent?
In inventory control, what is the difference between the ‘re-order quantity’ and the ‘re-order level’?
In which circumstance do we use the formula for the Economic Batch Quantity instead of the formula for the Economic Order Quantity?
State the Economic Order Quantity formula and say what it minimises.
State the EOQ formula, and what is true of ordering and holding costs at the EOQ?
How is the re-order level calculated when demand and lead time are certain, and how when they are not?
What is the difference between direct and indirect labour costs?
What is meant by a piecework system of remuneration?
Define the labour turnover ratio
Define the labour efficiency ratio
Define the labour idle time ratio
Define the labour capacity ratio
Define the labour production volume ratio (activity ratio)
How is overtime premium treated in cost accounting, and what is the exception to that treatment?
What is the difference between the allocation of overheads and the apportionment of overheads?
If overheads have been over-absorbed, how do the actual overheads incurred compare with the overheads absorbed?
What is meant by the reapportionment of service cost centre overheads?
What are the two methods of dealing with reciprocal servicing between service cost centres?
How is an overhead absorption rate calculated, and why is it based on budgeted figures?
How is over- or under-absorption of overheads calculated, and what causes it?
What are the two causes of an under- or over-absorption of overheads?
How is an under-absorption of overheads dealt with in the profit statement?
When is a machine hour absorption rate more appropriate than a labour hour rate?
What is the reason for a difference between the profit calculated under marginal costing principles and the profit calculated under absorption costing principles?
How is inventory valued under absorption costing?
Set out the layout of an absorption costing profit statement.
How is profit calculated under absorption costing?
Why does absorption costing report a higher profit than marginal costing when inventory increases during a period?
State the formula linking the absorption costing profit and the marginal costing profit.
Give two arguments in favour of absorption costing.
What causes absorption and marginal costing profits to differ, and which is higher?
What is meant by the word 'contribution'?
What is meant by the 'marginal cost of production'?
Under what circumstances will the profit using marginal costing and the profit using absorption costing be the same?
How is inventory valued under marginal costing, and how are fixed production overheads treated?
Set out the layout of a marginal costing profit statement.
How is profit calculated under marginal costing?
Why is marginal costing regarded as more useful for short-term decision making?
What happens to reported profit under absorption costing if production is increased while sales remain the same, and why is this a criticism?
In what circumstances is process costing used rather than job costing?
What is the basic cost per unit calculation in process costing when there are no losses and no work in progress?
What is an equivalent unit?
How are equivalent units calculated for closing work in progress?
Why are separate equivalent unit calculations made for materials and for conversion costs?
How is completed output and closing WIP valued once equivalent units are known?
Under the FIFO method of valuing process work in progress, how are the equivalent units calculated?
Under the weighted average method, how is the opening work in progress treated?
In process costing, what is meant by a normal loss?
In process costing, what is meant by an abnormal loss?
In process costing, what is meant by an abnormal gain?
In process costing, how are abnormal losses or gains valued?
How is the cost per unit calculated in a process when there is a normal loss with no scrap value?
How is a normal loss that has a scrap value dealt with?
How is the cost per unit of process output calculated where there is a normal loss with a scrap value, and how is abnormal loss valued?
How is an abnormal gain accounted for in the process account and the scrap account?
What is meant by the term ‘by-product’?
What is a joint product?
State two bases on which joint process costs may be apportioned between joint products.
How are joint costs apportioned on a SALES VALUE basis?
How are joint costs apportioned on a PHYSICAL UNITS basis, and why does the basis chosen matter?
How are the proceeds from a by-product normally treated?
What is the correct rule for deciding whether to process a joint product further?
How is a further-processing decision made?
What is the difference between a profit mark-up and a profit margin?
What are the four main differences between the output of service and manufacturing businesses?
What is job costing, and how is the cost of a job built up?
How does batch costing differ from job costing?
How is the cost per unit of a batch built up, and how is a mark-up applied?
How is a selling price found from a required MARGIN on selling price, and how does that differ from a mark-up on cost?
What is a composite cost unit, and why do service organisations use them?
Give a suitable composite cost unit for a hotel, a hospital and a haulage business.
In Activity Based Costing, what is meant by the term ‘cost driver’?
What is meant by the term ‘target cost’?
What is meant by the ‘cost gap’ in the context of target costing?
What are the basic principles involved in Total Quality Management?
What are the four types of cost relating to quality?
State the four steps in implementing activity based costing.
Under ABC, how is a cost such as set-up cost charged to a unit of product?
What is life cycle costing, and why can it change a product's apparent profitability?
What are the purposes of budgeting?
What is a flexed budget?
What is meant by the ‘principal budget factor’?
In what order should functional budgets be prepared, and why?
How is the production budget derived from the sales budget?
How is the materials purchases budget derived from the production budget?
What is top-down budgeting?
What is bottom-up budgeting?
What is budgetary slack, and why do managers create it?
Give two advantages and one disadvantage of participative (bottom-up) budgeting.
What is meant by goal congruence?
What is dysfunctional behaviour in the context of budgetary control?
What level of difficulty of budget target is generally regarded as most motivating?
What is an imposed (top-down) budget, and when is it appropriate?
If total sales revenue is expressed as a function of total advertising spend, which is the dependent variable?
In the linear equation y = a + bx, which is the dependent variable?
In the linear equation y = a + bx, where y is the total cost and x is the total production, what is the fixed cost?
In the linear equation y = a + bx, where y is total cost and x is total production, what is the variable cost per unit?
If the linear equation y = a + bx were drawn on a graph, what would be the gradient of the line?
In the formulae for regression analysis on the formulae sheet, what does the symbol n represent?
What is the symbol for the coefficient of correlation on the formulae sheet?
What is meant by the expression 'perfect positive linear correlation'?
How is the coefficient of determination calculated?
What does a coefficient of determination of 0.75 mean?
If there is perfect negative correlation between two variables, what will be the value of the coefficient of correlation?
What are the four components of a time series?
State the additive and the multiplicative time series models.
When is the multiplicative model more appropriate than the additive model?
How is the trend found using moving averages when there is an even number of periods in the cycle?
In the additive model, what must the seasonal variations sum to over a complete cycle, and what is done if they do not?
In the multiplicative model, what must the seasonal factors sum to for quarterly data and for monthly data?
How is a forecast made under the ADDITIVE time series model?
How is a forecast made under the MULTIPLICATIVE time series model?
Whose quantities are used as the weights in a Laspeyre price index, and what practical advantage does that give?
Whose quantities are used as the weights in a Paasche price index, and what practical drawback does that give?
How is a simple price index calculated?
How is a price index calculated, and how is the percentage change read from it?
What is the difference between a price index and a quantity index?
What is the practical drawback of a Paasche index compared with a Laspeyre index?
How are figures from two years compared in REAL terms?
How is an index series rebased to a new base year?
What are the three Vs originally used to define big data, and what two are commonly added?
What is meant by unstructured data?
What is big data analytics?
Give two potential benefits of big data to a management accountant.
Give three risks or limitations of using big data.
What is data mining?
What is what-if (sensitivity) analysis in a spreadsheet used for?
State two advantages and two disadvantages of using spreadsheets for budgeting.
Define the mean, the median and the mode.
When is the median a better measure of average than the mean?
How are the mean and the median found, and what does a gap between them tell you?
How is the median found from a grouped frequency distribution?
Define the range and the interquartile range, and state which is the more useful measure of spread.
What does the standard deviation measure, and what is the variance?
What is the coefficient of variation and what is it used for?
How do you compare the variability of two data sets with different means?
State four properties of the normal distribution.
What is the standard normal variable z, and how is it calculated?
What does the figure read from the normal distribution tables represent?
How is the normal distribution used to find the proportion of items above a given value?
Approximately what proportion of a normal population lies within one, two and three standard deviations of the mean?
Why can the area under the normal curve be interpreted as a probability?
Distinguish between simple interest and compound interest.
State the compound interest formula and the formula for an effective annual rate.
State the formula for the present value of a single sum receivable in n years' time at a discount rate of r.
How is a present value calculated, and what does a discount factor represent?
What is an annuity, and what is an annuity factor?
What is an annuity factor, and how is it used - including for a perpetuity or a delayed start?
State the formula for the present value of a perpetuity, and say when it is used.
What is the effective annual rate of interest, and why does it exceed the nominal rate?
What is the difference between capital expenditure and revenue expenditure?
What is a ‘sunk cost’?
What is meant by an 'incremental cost'?
What is meant by the ‘payback period’?
What is the definition of the Internal Rate of Return (IRR)?
State two advantages and two disadvantages of the payback period.
How is the payback period calculated for constant and for uneven cash flows?
How is the NPV of a project calculated, and what is the decision rule?
What does the sales volume variance measure?
What is the purpose of an operating statement (as part of variance analysis)?
Give possible reasons for an adverse material expenditure variance.
How is the material price variance calculated, and on what quantity is it based?
How is the material usage variance calculated?
State the material price and usage variance calculations.
How are the labour rate and labour efficiency variances calculated?
How is an idle time variance calculated, and can it ever be favourable?
Distinguish between the fixed overhead expenditure variance and the fixed overhead volume variance.
State the fixed overhead expenditure and volume variances, and how they relate to over/under-absorption.
In a marginal costing operating statement, which fixed overhead variance does not arise, and how is the sales volume variance valued?
What are the four main elements that one would expect to appear in a Mission Statement?
What is the difference between an objective and a critical success factor?
Distinguish between economy, efficiency and effectiveness.
Why is performance measurement more difficult in a not-for-profit organisation?
What is the difference between a financial and a non-financial performance indicator, and why are both needed?
Distinguish between a target, a standard and a benchmark.
State two problems with judging a manager on a single performance measure.
What is the difference between controllable and uncontrollable costs when appraising a manager?
What is the Current Ratio?
What is the Quick Ratio (or Acid-test Ratio)?
How is the Interest Cover calculated?
How is the Dividend Cover calculated?
How is Return on Capital Employed (ROCE) calculated, and what are its two component ratios?
How do operating margin, asset turnover and ROCE relate to one another?
How are the inventory holding period, receivables days and payables days calculated?
How is the working capital (cash operating) cycle calculated, and why does it matter?
How is gearing calculated, and what does high gearing indicate?
What are the four perspectives covered by the Balanced Scorecard?
What is meant by the term ‘benchmarking’?
In assessing ‘Value for Money’, what are the three ‘E’s’?
State the six dimensions of the building block model of performance measurement.
Give a suitable measure for each of the four perspectives of the balanced scorecard.
State three types of benchmarking.
Give three non-financial measures of the quality of a service.
Give two non-financial measures used to monitor the workforce.
Why can non-financial indicators be harder to use than financial indicators?
How is the Return on Investment (ROI) calculated?
How is Residual Income (RI) calculated?
Distinguish between a cost centre, a profit centre and an investment centre.
State the ROI and residual income calculations for a division.
Why can ROI and residual income lead a divisional manager to different decisions on the same project?
State one advantage of residual income over ROI.
State one disadvantage of residual income compared with ROI.
Card 1 of 243. Question side.