Professional Documents
Culture Documents
CBE
2 hours Long
Section A
35 2 marks question
MCQ
Number entry
Multiple response
Multiple Matching
Section B
Budgeting
Performance Measurements
Data is raw facts and figure.
Control
Cost effective – Benefits derived from the use of the information must be greater than the
cost incurred in obtaining the information.
Types of information
Secondary information is information collected for a different person than it is going used
for.
Complete
Cost Beneficial
User Targeted
Relevant
Authoritative
Timely
Easy to use.
ACCURATE
CORRECTC
Comprehensibility
Objectivity
Relevance
Reliability
Entirety
Cost effectiveness
Timeliness
Communicated
Types of Accounting
Financial Accounting
Cost Accounting
Management Accounting
Interlocking accounting 2 set of records for financial one for management accounting it
means that you have information’s for selective reasons so it it talored to that but the
downfaili is that it is timely
Integrated accounts we have one set that record both financial and management
Types of information
Profitabiliy
Going Concern- The assumption that the business will coutiune into the froseeable future
without the need or interntern of changes it scale of operation
Sample
Population
Categorical data
Numerical data
Sources of data
Machine/sensor data
Transaction data
Human/social data
Internal information
Government Sources
Business contacts
Trade association and journal deal with the particall industry we deal with and act as
responsive when ppl are in dispute
Financial press business press and general media deal with international
The internet
Other Sources
Sampling is taking a small part of the population and using the answer from that as the
result as the population on a whole.
Random Sampling
Systemic sampling
Multistage sampling
Quota sample
Cluster Sample
Presentation of information
Plan
Write
Review
Content Page
Terms of
Sources of
Analysis
Conclusion
Appendix
Tables
Charts ( Percentage, Multiple Bar, Pie Chart, Scatter Diagrams)
Line Charts is used to show trends time related data
Mapping Charts Presents Information Geographically
Dash boards- provide relevant summary and provided a few drivers that give and over view of a
business area. Each driver can be further analysed by drilling down into the supporting data.
Classification Of Cost
Classification by elements
Material
Labour
Expense
Classification by Nature
Direct Cost is all the
Material
Labour
Expense which will equal to prime cost.
Or Indirect
Classification by Function
Selling or Marketing Cost
Distribution Cost
Research and Development Cost
Financing Cost
Activity
1. Expense Direct
2. Expense Indirect
3. Materials Indirect
4. Labour Indirect
5. Materials Indirect
6. Labour Direct
7. Expenses Indirect
ACTIVITY
a) Indirect
b) Direct
c) Indirect
d) Indirect
e) Indirect
f) Indirect
ACITIVITY
a) Direct
b) Indirect
c) Indirect
d) Indirect
e) Direct
f) Direct
Activity
1. Production
2. Admin
3. Production
4. Admin
5. Distribution
6. Financing
7. Selling
8. Distribution
9. Finance
10. Selling
Classification by behaviour
10
Units
10 20 30 40
0.75
0.50
0.25
10 20 30 40
Units cost falls at a Declining rate as Activity level increase.
Unit Variable Cost
E.g. Direct material per unit of 2.50
Cost
2.50
10 20 30 40
At Total Cost
0 Minutes 50 + 0 = 50
30 Minutes 50 + (30*1.10) =53
60 Minutes 50 + (60* 0.10) = 56
90 Minutes 50 + (90*0.10) = $59
59
56
53
Variable
50 Fixed
30 60 90
60
40
20
Units
50 100 150 200 1000
Unit Fixed Cost
Cost
Basic Graph
Activity
a) Fixed
b) Fixed
c) Fixed
d) Variable
e) Semi Variable
f) Semi Variable
g) Fixed
h) Stepped
i) Variable
Activity
The line that cut the x axis represent fixed cost
a) The line would cross the y axis at the point 1488
b) The gradient of the line is 20
c) The independent variable is x
d) The dependant variable is y
Variable cost Highest cost lowest Cost / Highest activity level – Lowest activity
level
9000-7000
400 – 200
= 10/unit
FC =TC-VC
At the Highest activity level
9000-(10*400) = 5000
TC = FC + VC
5000+ (10*350) =$8500
Activity Stepped Cost
Activity Level 4000 6000 75000
Total cost 40,800 50000 54800
VC = 54800 – 50,000
________________
7500 – 6000 = 3.20 /units
Direct Materials are materials that can be directly attributed to a unit of production.
Indirect Materials are any other materials used in the production process that cannot be
directly attributed to a unit of production.
Stores Ledger
Card
Perpetual inventory is recording the receipts, issues and the resulting balances of the
individual items in quantity or quantity and value as they occur. This is done by
updating the stores ledger card which shows the number and value of the items received,
issued and its current balance, as well as, the bin card.
PURCHASE CONSIDERATIONS
When a company is considering purchasing inventory it must take into account the
following
1. Maintaining an adequate supply of materials to ensure that the company
does not
suffer from inventory shortages.
2. Minimising its investment in inventory thus minimising costs associated with
storage of
inventory.
3. Obtaining the most economic price which ensures that costs are kept to a
minimum.
4. Minimising losses arising from perishable and obsolete items.
5. Maintenance of adequate records.
6. Determining the quantity required. To determine how much should be purchased the
company can consider its projections of sales in the forthcoming period, the
level of inventory it presently has and how much it wishes to retain in the future.
Sales
Less Opening
inventory Add Closing
inventory Quantity
Required
X
(X)
X
X
Therefore, a business must determine how to value its inventory and its issues of materials to
production. The main methods of valuation include first in first out, last in first out,
continuous weighted average and periodic weighted average.
Production Department
JST Required
High Quality Since poor quality will reduce throughout ad
dependability of supplies
Speed to ensure customers order are met through production
(Not inventory)
Reliability of production no hold up
Flexibility no responds no customer orders (production in
small batches)
Lowe cost can result from high quality production. Faster
throughout and the elimination of errors.
Lifo Result in
Highest Valuation of issues since newest prices are the highest prices.
Low estimate of closing Inventory since they are valued at the oldest
princes which are the prices
Overstatement of cost of sales and therefore understatement of profit
Continuous Cumulative Weighed Average
Date Oty Unit Total Cost
Date Oty Unit Cost Total Cost
1 100 200
3 200 2.10 420
300 2.07 620
(150) 2.07 (310)
10 300 2.20 660
450 2.16 970
12 (350) 2.16 (754)
100 2.16 970
24 300 2.30 690
400 966/400 = 906
2.265
26 (200) 2.265 (453)
200 2.265 453
Periodic Weighted Average
100 200
3 200 2.10 420
10 300 2.20 660
24 300 2.30 690
900 1970
Average Cost 1970/900 =
Per Unit = 2.19
Issues
5 150 2.19 328
12 350 2.19 766
26 200 2.19 438
760 1532
Closing
Inventory
900 – 700 =200 200 2.19 = 438
unit