Level 6 – Page 6 – Accountants Institute
Exam Unit: Performance Management (3.5)

Learning Outcome

To be able to apply both traditional and contemporary approaches to cost accounting in a variety of contexts and evaluate the impact of ‘modern’ data processing and processing technologies such as MRP, ERP and JIT; explain and apply the principles of standard costing, calculate variances in a variety of contexts and critically evaluate the worth of standard costing in the light of contemporary criticisms; develop budgets using both traditional and contemporary techniques, evaluate both interactive and diagnostic uses of budgets in a variety of contexts and discuss the issues raised by those that advocate techniques ‘beyond budgeting’; prepare appropriate financial statements for cost, profit and investment centre managers, calculate appropriate financial performance indicators, assess the impact of alternative transfer pricing policies and discuss the behavioural consequences of management control systems based on responsibility accounting, decentralisation and delegation.

Cost Accounting Systems:
1. Marginal Costing compared to Absorption Costing
2. Profit Statements
3. Reconciling Profit
4. Job Costing
5. Batch Costing
6. Process Costing
7. Joint Product CostingStandard Costing:
1. Performance Levels
2. Setting Standard Costs
3. Variable Cost Variances
4. Fixed Production Overhead Variances
5. Sales Variances
6. Reconciling Actual to Budget Profit
7. Standard Marginal Costing
8. Variances
9. Capacity Ratios
10. Interpretation of Variances
11. BenchmarkingManagement Accounting:
1. Cost Behaviour
2. Activity Based Techniques
3. Breakeven
4. Decision Making
5. Avoidable, Differential, and Incremental Costs
1. Budget Preparation
2. Cash Budget
3. Rolling Budget
4. Forecasting & Planning
5. Sensitivity Analysis
6. Zero-Based Budgeting
7. Programme Planning
8. Activity Based
9. Not-For-ProfitControl and Performance Measurement:
1. System Design
2. Feedback
3. Control Information
4. Flexible Budgets
5. Behavioural Aspects
6. Developments
7. Performance Evaluation
8. Reporting
9. Non-Financial Indicators
10. Balanced Scorecard
11. Cost, Revenue, Profit, and Investment Centres
12. Transfer Pricing