ACCA Pakistan Management Accounting (MA) Syllabus

Management Accounting (MA) syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Management Accounting (MA) in ACCA Pakistan, not a summary of it.

1. 1

   The Nature and Purpose of Management Accounting

   3 topics

   • Data and Information
   • Management Information Requirements
   • Cost Classification
2. 2

   Cost Accounting Techniques

   4 topics

   • Accounting for Materials
   • Accounting for Labour
   • Accounting for Overheads
   • Marginal and Absorption Costing
3. 3

   Costing Methods

   3 topics

   • Job and Batch Costing
   • Process Costing
   • Service and Operation Costing
4. 4

   Budgeting

   4 topics

   • Functional and Master Budgets
   • Budget Preparation
   • Flexible Budgets
   • Budgetary Control
5. 5

   Standard Costing and Variance Analysis

   4 topics

   • Standard Costing Principles
   • Material and Labour Variances
   • Overhead and Sales Variances
   • Reconciliation of Profit
6. 6

   Performance Measurement

   4 topics

   • Financial Performance Indicators
   • Non-Financial Performance Indicators
   • Divisional Performance
   • Balanced Scorecard
7. 7

   Short-Term Decision Making

   3 topics

   • Cost-Volume-Profit Analysis
   • Relevant Costing
   • Limiting Factor Analysis

Management Accounting (MA) flashcards for ACCA Pakistan

21 of 60 cards from the Management Accounting (MA) deck — real questions with worked answers.

1. What is the difference between data and information in management accounting?

   Data are raw, unprocessed facts and figures (e.g. raw transaction records). Information is data that has been processed, structured and given context so it is meaningful and useful for decision-making.

2. List the qualities of good (useful) management information, commonly remembered as 'ACCURATE'.

   Accurate, Complete, Cost-effective, Understandable, Relevant, Accessible, Timely, Easy to use. The information's benefit should exceed the cost of producing it.

3. What are the three levels of management information and the type of decisions at each?

   Strategic (long-term, top management, external/summarised data), Tactical (medium-term, middle management, resource allocation), and Operational (short-term, day-to-day, detailed transaction data).

4. Distinguish between financial accounting and management accounting.

   Financial accounting is for external users, is legally required, follows accounting standards, is historic and covers the whole entity. Management accounting is for internal users, is optional, has no set format, is forward-looking and can cover parts of the business.

5. What is a cost unit and a cost centre?

   A cost unit is a unit of product or service to which costs are charged (e.g. one car, one patient-day). A cost centre is a location, function or item of equipment for which costs are accumulated.

6. Define direct cost and indirect cost (overhead).

   A direct cost can be traced in full to the cost unit being made (e.g. direct materials, direct labour). An indirect cost (overhead) cannot be traced directly and must be shared/apportioned (e.g. factory rent).

7. How are costs classified by behaviour?

   Variable cost (varies in total with activity), Fixed cost (constant in total within the relevant range), Semi-variable/mixed cost (has both fixed and variable elements), and Stepped fixed cost (fixed over a range then jumps to a new level).

8. What is prime cost?

   Prime cost is the total of all direct costs: direct materials + direct labour + direct expenses.

9. How does the high-low method estimate variable cost per unit?

   Variable cost per unit = (Cost at highest activity − Cost at lowest activity) ÷ (Highest activity − Lowest activity). Fixed cost is then found by subtracting total variable cost from total cost at either level.

10. What is the Economic Order Quantity (EOQ) formula and what does it minimise?

    EOQ = √(2·Co·D ÷ Ch), where Co = cost per order, D = annual demand, Ch = holding cost per unit per year. It minimises total annual ordering plus holding costs.

11. Define reorder level, minimum (buffer) inventory level and maximum inventory level.

    Reorder level = maximum usage × maximum lead time. Minimum level = reorder level − (average usage × average lead time). Maximum level = reorder level + reorder quantity − (minimum usage × minimum lead time).

12. What is the formula for the reorder level when demand and lead time are certain?

    Reorder level = usage per period × lead time (i.e. the inventory needed to cover demand during the replenishment lead time).

13. Contrast FIFO and LIFO methods of pricing material issues.

    FIFO issues the oldest inventory first, so closing inventory is valued at most recent prices. LIFO issues the newest inventory first, so issues are at recent prices and closing inventory at older prices. (IAS 2 permits FIFO/AVCO but not LIFO.)

14. How is the periodic weighted average cost (AVCO) per unit calculated?

    AVCO per unit = Total cost of goods available for issue ÷ Total units available for issue, recalculated each time new inventory is received (cumulative weighted average).

15. What is the difference between stores ledger and bin card?

    A bin card is a quantity-only record kept at the storage location showing physical movements. A stores ledger is an accounting record kept in the costing department showing both quantities and values of materials.

16. Distinguish direct labour cost from indirect labour cost.

    Direct labour cost is the wages of workers directly engaged in producing the cost unit. Indirect labour cost covers supervisors, maintenance, idle time and overtime premium (generally) — it is treated as an overhead.

17. How is idle time normally accounted for, and is it direct or indirect?

    Idle time is paid time during which no production occurs. It is normally treated as an indirect cost (overhead). Idle time hours = total hours paid − hours actively worked.

18. How is overtime premium usually treated, and when is it a direct cost?

    Overtime premium (the extra above the normal rate) is usually treated as an overhead. It is treated as a direct cost only when overtime is worked at the specific request of a customer for their job.

19. What is the formula for labour turnover rate?

    Labour turnover rate = (Number of employees leaving and needing replacement during the period ÷ Average number of employees during the period) × 100%.

20. Distinguish labour efficiency ratio, capacity ratio and activity (production volume) ratio.

    Efficiency = (standard hours for actual output ÷ actual hours worked) × 100. Capacity = (actual hours worked ÷ budgeted hours) × 100. Activity = (standard hours for actual output ÷ budgeted hours) × 100. Activity = Efficiency × Capacity.

21. What are the two main remuneration methods, time-based and piecework?

    Time-based pay = hours worked × rate per hour (plus any overtime). Piecework pay = units produced × rate per unit, rewarding output rather than time. Bonus/incentive schemes combine elements of both.

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