Management Accounting - CPA Australia

of CPA Australia are required to attain a predetermined level of technical competence before the CPA ..... Explain the historical development of management accounting ..... Much of the data used to prepare financial accounts and management ...
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STUDY

MANUAL

Foundation level

Management Accounting 2012

Second edition January 2012 First edition 2010 ISBN 9781 4453 8013 1 Previous ISBN 9780 7517 8151 9 British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. Published by BPP Learning Media Ltd All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means or stored in any retrieval system, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the publisher. We are grateful to CPA Australia for permission to reproduce the Learning Objectives, the copyright of which is owned by CPA Australia. Printed in Australia © BPP Learning Media Ltd 2012

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Welcome to the next step in your career – CPA Program Today’s CPA Program is a globally recognised education program available around the world. All candidates of CPA Australia are required to attain a predetermined level of technical competence before the CPA designation can be awarded. The CPA Program foundation level is designed to provide you with an opportunity to demonstrate knowledge and skills in the core areas of accounting, business and finance. A pass for each exam is based on a determination of the minimum level of knowledge and skills that candidates must acquire to have a good chance at success in the professional level of the CPA Program. In 2012 you have more opportunities to sit foundation level exams, allowing you to progress through to the professional level of the CPA Program at your own pace. The material in this study manual has been prepared based upon standards and legislation in effect as at 1 September 2011. Candidates are advised that they should confirm effective dates of standards or legislation when using additional study resources. Exams for 2012 will be based on the content of this study manual.

Additional Learning Support A range of quality learning products will be available in the market for you to purchase to further aid your core study program and preparation for exams. These products will appeal to candidates looking to invest in additional resources other than those provided in this study manual. More information is available on CPA Australia’s website www.cpaaustralia.com.au/learningsupport You will also be able to source face-to-face and online tuition for CPA Program foundation level exams from registered tuition providers. The tuition provided by these registered parties is based on current CPA Program foundation level learning objectives. A list of current registered providers can be found on CPA Australia’s website. If you are interested you will need to liaise directly with the chosen provider to purchase and enrol in your tuition program.

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Contents

Page

Introduction Welcome to CPA Australia

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Chapter features

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Chapter summary

viii

Answering multiple choice questions

x

Learning objectives

xi

Chapter 1

The nature and purpose of management accounting

1

2

Decision making and relevant costing

39

3

Budgeting

63

4

Cost behaviour and CVP analysis

97

5

Overheads, absorption and marginal costing

131

6

Overhead costing – activity-based costing

167

7

Process and job costing

187

8

Standard costing

229

9

Variance analysis

243

10

Capital expenditure

267

11

Inventory and pricing decisions

289

12

Performance measurement and ev