Management Accounting CPA KASNEB notes

Management Accounting CPA KASNEB notes

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11.1 Nature and purpose of cost and management accounting
– The nature of cost accounting and costing terms
– The role of cost accounting in management
– The purposes of cost accounting information
– Scope of cost accounting
– Meaning of management accounting, scope, limitations, applications
– Relationship between cost, financial and management accounting
– Selection of an ideal cost accounting system

11.2 Cost classification
– Definition and purpose of cost classification
– Methods of cost classification: by nature/elements of manufacturing costs; functional classification; behavioural classification; controllability; time; financial accounting; identification with inventory; for decision making

11.3 Cost estimation
– Meaning of cost estimation
– Methods of estimating cost; non-mathematical methods like engineering method, accounts analysis method and high-low method; mathematical methods like scatter graph method, OLS regression method (simple linear regression only)

11.4 Accounting, for material, labour and overheads
– Accounting for materials and inventory; material cost records, purchasing procedures, receipt and issues of material, methods of valuing material issues, inventory control procedures; economic order quantity (EOQ) and economic batch quantity(EBQ) models and back flush
– Accounting for labour: Methods of labour remuneration, labour control procedures, maintenance of labour records
– Accounting for overheads: Types of overheads, manufacturing, distribution and administration, service departmental cost allocation and apportionment, overheads analysis, overhead absorption rates, over or under absorption

11.5 Costing methods
– Job order costing
– Batch costing
– Process costing (including work in progress; joint and by-products)
– Service costing
– Unit costing
11.6 Marginal and absorption costing
– Distinction between marginal and absorption costing
– Valuation of products under marginal and absorption costing
– Preparation of marginal and absorption statements; cost of production and profit determination
– Applications of marginal costing: break-even analysis and charts (single product)
– Simplified decision problems; accept or reject, special order, dropping a product, make or buy
– Operating statements

11.7 Activity based costing
– Meaning of ABC
– Types of activities
– Overhead absorption rates
– Incomes statement

11.8 Budgeting and budgetary control
– Nature and purposes of budgets
– Preparation of budgets; master budgets, functional (department budgets, cash budgets), proforma financial reports (income statements and balance sheets)
– Purpose of budgetary control; operation of a budgetary control system, organisation and coordination of the budgeting function
– Distinction between budgeting and budgetary control in the private and public sectors

11.9 Standard costing
– Types of standards
– Principles of setting standards
– Standard cost card
– Behavioural aspects of standard costing
– Generation of standard cost information
– Materials, labour and overheads variances; price, efficiency mix and yield variances


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2 thoughts on “Management Accounting CPA KASNEB notes”

    1. Hello Mercy, This is a sample. we have only displayed a few pages. For complete notes you only access them after buying.

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