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ICMAP

SYLLABUS 2016
Estd. 1951

FUNDAMENTAL LEVEL
F4 - Fundamentals of Management Accounting

Weightage
Part-A The Nature, Scope and Purpose of
Part-A Management Accounting 20%
Part-C
Part-B Part-B Accounting for Cost Management 40%

Part-C Cost Accounting Methods 40%

Syllabus Overview: l Identify and explain classification of cost and their


behaviour
This course is designed to get fundamental knowledge of
cost, its behaviour and classification. The syllabus l Apply material costing and controls
provides basic costing techniques used in Job and l Classify, calculate and evaluate labour cost and its
Process costing. This paper is a fundamental for higher efficiency
level papers of management accounting stream.
l Apply manufacturing overheads costing and controls
Learning Outcomes:
l Analyse and calculate product cost under different
On completion of this course, students will be able to: costing methods i.e., process costing, job order
costing, batch and service costing
l Understand the concept and scope of cost
accounting

Detailed Contents Weightage Level of


in % Study Required

PART-A: THE NATURE, SOURCE AND PURPOSE OF MANAGEMENT ACCOUNTING


1. Introduction to l Scope of management accounting in business U
Management l Objective of Cost Accounting U
Accounting l How cost accounting is different from management U
accounting
l Role of management accountant in business U
2. Concept and Scope of l Concepts of cost U
Cost Accounting l Cost elements U
l Cost centre & responsibility centre 20 U
l Cost units and cost objectives U
l Sources and uses of cost data U
l Costing department and its relationship with other U
department
l Cost accounting system U
l Cost accounting v/s financial accounting U
l Role of cost accounting in a management U
information system

Institute of Cost and Management Accountants of Pakistan


64 (Constituted under Cost and Management Accountants Act, 1966)
ICMAP

SYLLABUS 2016
Estd. 1951

3. Cost Classification l Cost classification for control U


and Cost Behaviour l Total product/ service cost A
l Direct costs and indirect costs A
l Functional costs A
l Fixed, variable, semi-variable & steped cost D
l Determining the fixed and variable elements of
semi-variable costs and high and low point method D
l Production and non-production costs D
l Cost behaviour and level of activity D
l Analytical classification of cost D
l Statement of cost of goods manufactured and sold D
l Flow of cost: A
recording of material, labour and manufacturing
overheads
recording of over/ under absorbed manufacturing
overheads and closing of over /under absorbed
manufacturing overheads
recording of cost of goods sold
T-accounts for material, labour, manufacturing
overheads, work in process and finished goods

PART-B: ACCOUNTING FOR COST MANAGEMENT


4. Material Costing and l Accounting for material costs A
Controls l Ordering, receipt and issue of raw materials A
l Methods of inventory valuation A
l Cost classification for inventory valuation and profit D
measurement
l Accounting for losses of material U
l Purpose and methods of inventory control U
5. Labour Costing and l Classification of labour i.e., direct and indirect labour U
Controls l Productivity and efficiency A&D
l Remuneration methods: U
straight piece rate and differential piece rate
incentive wage plan
group bonus 40
l Time sheet and job cards A
l Recording labour costs A
l Accounting for labour costs A
l Accounting for payroll U
l Wage book U
l Labour turnover U
6. Manufacturing l Classification and collection of overhead U
Overheads Costing l Overhead absorption rates and basis of absorption A
and Controls l Overhead allocation A
l Overhead apportionment and re-apportionment A
l Overhead absorption rates i.e., blanket absorption A
rates and departmental absorption rates
l Recording of factory overhead cost D
Recording of planned/ applied and actual
overhead
Over and under applied factory overhead and
its disposal

Institute of Cost and Management Accountants of Pakistan


(Constituted under Cost and Management Accountants Act, 1966) 65
ICMAP

SYLLABUS 2016
Estd. 1951

Part-C: COST ACCOUNTING METHODS


7. Job, Batch and l Introduction to job costing and its need U
Service Costing l Preparation of job cost sheets U
l Batch costing A
l Service costing/ operation costing A
8. Process Costing l The Basics of process costing U
l Introduction to complete and incomplete units of A
output
l Valuing closing work in progress A
l Treatment of units transferred to other departments 40 A
l Preparation of process account and all other A
relevant accounts
l Preparation of complete cost of production report A
Note: The syllabus does not cover FIFO and
Weighted average method as these topics are
covered at Graduation level paper)
TOTAL WEIGHTAGE 100

NOTE:-
U = Understanding
A = Application
D = Decision

Institute of Cost and Management Accountants of Pakistan


66 (Constituted under Cost and Management Accountants Act, 1966)