Association of Chartered Certified Accountants (ACCA) Business and Technology (BT) and Management Accounting (MA) Syllabus

Distinguish leadership from management per Kotter.

Management copes with complexity through planning, organising and controlling to produce order. Leadership copes with change by setting direction, aligning people, and motivating/inspiring.

Name the stages of a systematic recruitment and selection process.

Identify the vacancy, prepare job analysis/description and person specification, advertise/source candidates, shortlist, interview and test, select, make an offer, and induct.

Differentiate a job description from a person specification.

A job description sets out the duties, responsibilities and scope of the role. A person specification states the skills, qualifications, experience and attributes the ideal candidate should possess.

State the stages of the systematic training/development cycle.

Identify training needs, set training objectives, design/plan the training, deliver/implement the training, and evaluate/validate its effectiveness.

List the five levels of Maslow's hierarchy of needs from lowest to highest.

Physiological, safety/security, social (love/belonging), esteem, and self-actualisation.

In Herzberg's two-factor theory, distinguish hygiene factors from motivators.

Hygiene factors (pay, conditions, supervision, policy) cause dissatisfaction if poor but do not motivate. Motivators (achievement, recognition, responsibility, advancement) create genuine satisfaction and motivation.

State the formula for motivation in Vroom's expectancy theory.

$\text{Motivation (Force)} = \text{Expectancy} \times \text{Instrumentality} \times \text{Valence}$ — effort leads to performance, performance leads to reward, and the reward is valued.

Name the stages of Tuckman's model of team development.

Forming, storming, norming, performing, and (later addition) adjourning/mourning.

What are Belbin's three categories of team roles?

Action-oriented roles (Shaper, Implementer, Completer-Finisher), people-oriented roles (Coordinator, Teamworker, Resource Investigator), and thinking/cerebral roles (Plant, Monitor-Evaluator, Specialist).

Define a cost object, a cost unit, and a cost centre.

A cost object is anything for which cost is measured. A cost unit is a unit of product/service to which costs are charged. A cost centre is a location/function/department to which costs are accumulated.

Distinguish direct costs from indirect costs (overheads).

Direct costs can be traced specifically and wholly to a single cost unit (e.g. raw materials, direct labour). Indirect costs (overheads) cannot be traced to one unit and are shared across many (e.g. factory rent).

What is the general formula for total cost using the high-low method's cost equation?

$y = a + bx$, where $y$ = total cost, $a$ = total fixed cost, $b$ = variable cost per unit, and $x$ = activity level (units).

State the high-low method formula for variable cost per unit.

$\text{Variable cost per unit} = \dfrac{\text{Cost at highest activity} - \text{Cost at lowest activity}}{\text{Highest activity level} - \text{Lowest activity level}}$

Describe the cost behaviour of a 'stepped fixed cost'.

It is fixed over a particular range of activity but jumps to a higher fixed level once a threshold is exceeded (e.g. needing an extra supervisor beyond a certain output).

State the Economic Order Quantity (EOQ) formula.

$EOQ = \sqrt{\dfrac{2 C_o D}{C_h}}$, where $C_o$ = cost per order, $D$ = annual demand, and $C_h$ = holding cost per unit per year.

How is the reorder level calculated in inventory control (with no buffer)?

$\text{Reorder level} = \text{Maximum usage} \times \text{Maximum lead time}$ (or average usage × average lead time when ignoring variability).

Distinguish a labour efficiency variance from a labour rate variance.

The labour rate variance measures the difference between actual and standard pay rate for hours worked. The labour efficiency variance measures the difference between actual hours and standard hours for output, valued at standard rate.

What is the predetermined overhead absorption rate formula?

$\text{OAR} = \dfrac{\text{Budgeted overheads}}{\text{Budgeted activity level (e.g. labour hours)}}$

How do you calculate under- or over-absorption of overheads?

$\text{Absorbed overhead} = \text{OAR} \times \text{actual activity}$. If absorbed > actual overhead it is over-absorbed; if absorbed < actual overhead it is under-absorbed.

Distinguish absorption costing from marginal costing in valuing inventory.

Absorption costing includes fixed production overheads in unit cost (inventory carries fixed cost). Marginal costing values inventory at variable production cost only and treats fixed overheads as period costs.

When inventory increases, which gives a higher profit — absorption or marginal costing, and why?

Absorption costing gives the higher profit, because some fixed overhead is carried forward in the increased closing inventory rather than being charged in the period.

What distinguishes job costing, batch costing, and process costing?

Job costing is for unique one-off jobs; batch costing is for a group of identical units produced together (cost per unit = batch cost ÷ units); process costing is for continuous mass production through sequential processes.

In process costing, how are equivalent units used?

Equivalent units convert partly-completed work-in-progress into the equivalent number of fully-completed units, so that costs can be apportioned fairly between finished output and closing WIP.

What is the difference between normal loss and abnormal loss in process costing?

Normal loss is the expected, unavoidable loss inherent to the process (its cost is absorbed by good output). Abnormal loss is loss above the expected level and is valued and written off to the income statement.

What is the main purpose of a budget, and what does a master budget comprise?

Budgets plan, coordinate, communicate, motivate, control and authorise. The master budget is the summary, comprising the budgeted income statement, budgeted statement of financial position, and the cash budget.

Distinguish incremental budgeting from zero-based budgeting (ZBB).

Incremental budgeting bases the new budget on last period's figures adjusted for change. ZBB starts each budget from zero, requiring every activity to be justified afresh as if newly proposed.

What is a flexible budget, and why is it useful for control?

A flexible budget is recalculated (flexed) to the actual level of activity achieved. It allows a fair comparison of actual results against budgeted costs at the same volume, isolating true performance variances.

What is a standard cost, and what are the two main types of standard?

A standard cost is a predetermined estimate of the cost of one unit. Types include ideal standards (perfect conditions, no waste) and attainable/expected standards (allowing for normal inefficiency).

State the materials usage variance and materials price variance formulas.

$\text{Usage variance} = (\text{Standard qty for actual output} - \text{Actual qty}) \times \text{Standard price}$. $\text{Price variance} = (\text{Standard price} - \text{Actual price}) \times \text{Actual qty purchased}$.

Give the formula for contribution per unit and the contribution/sales (C/S) ratio.

$\text{Contribution per unit} = \text{Selling price} - \text{Variable cost per unit}$. $\text{C/S ratio} = \dfrac{\text{Contribution per unit}}{\text{Selling price}}$ (also = total contribution ÷ total sales).

State the break-even point in units and in revenue.

$\text{BEP (units)} = \dfrac{\text{Fixed costs}}{\text{Contribution per unit}}$ and $\text{BEP (revenue)} = \dfrac{\text{Fixed costs}}{\text{C/S ratio}}$.

How do you calculate the units needed to achieve a target profit, and the margin of safety?

$\text{Units for target profit} = \dfrac{\text{Fixed costs} + \text{Target profit}}{\text{Contribution per unit}}$. $\text{Margin of safety} = \text{Budgeted sales} - \text{Break-even sales}$ (often shown as a % of budgeted sales).

In short-term decision making, what is a 'relevant cost' and which costs are non-relevant?

A relevant cost is a future, incremental cash flow that arises from a decision. Non-relevant costs include sunk costs (past), committed costs, and notional/non-cash items such as depreciation and absorbed overheads.

What is an opportunity cost?

The value of the benefit forgone (sacrificed) by choosing one alternative over the next best alternative use of a resource. It is a relevant cost in decision-making.

How is a product ranked when there is a single limiting factor (scarce resource)?

By ranking products on the contribution earned per unit of the scarce (limiting) resource — $\dfrac{\text{Contribution per unit}}{\text{Resource units per unit}}$ — and producing the highest first.

In a make-or-buy decision with no scarce resources, what is the decision rule?

Compare the marginal (relevant variable) cost of making in-house with the external purchase price; buy in only if the bought-in price is lower than the relevant cost of making, considering any avoidable fixed costs.

State the formula for the payback period (even cash flows) and one drawback of the method.

$\text{Payback period} = \dfrac{\text{Initial investment}}{\text{Annual net cash inflow}}$. Drawback: it ignores the time value of money and cash flows received after the payback point.

What is the Net Present Value (NPV) decision rule, and the discount factor formula?

Accept a project if NPV is positive (present value of inflows exceeds the outlay). Discount factor $= \dfrac{1}{(1+r)^{n}}$, where $r$ is the cost of capital and $n$ the year.

Define the Internal Rate of Return (IRR) and its decision rule.

The IRR is the discount rate at which a project's NPV equals zero. Accept the project if its IRR exceeds the company's cost of capital (target rate of return).

State the formula for the Accounting Rate of Return (ARR).

$\text{ARR} = \dfrac{\text{Average annual accounting profit}}{\text{Average (or initial) investment}} \times 100\%$.

What is Return on Capital Employed (ROCE) and how is it calculated?

ROCE measures profitability relative to capital used: $\text{ROCE} = \dfrac{\text{Operating profit (PBIT)}}{\text{Capital employed}} \times 100\%$, where capital employed = total assets − current liabilities (or equity + debt).

Name the four perspectives of the Balanced Scorecard.

Financial, Customer, Internal business process, and Learning and growth (innovation) perspectives.

Distinguish economy, efficiency and effectiveness (the '3 Es' of value for money).

Economy: obtaining resources at lowest cost (inputs). Efficiency: maximising output from given inputs (input-to-output ratio). Effectiveness: achieving the intended objectives/outcomes.

What is the formula for the inventory holding (turnover) period in days?

$\text{Inventory days} = \dfrac{\text{Average inventory}}{\text{Cost of sales}} \times 365$ — the average number of days inventory is held before sale.

Distinguish gross profit margin from net (operating) profit margin.

$\text{Gross profit margin} = \dfrac{\text{Gross profit}}{\text{Revenue}} \times 100\%$ (after cost of sales). $\text{Net/operating margin} = \dfrac{\text{Operating profit}}{\text{Revenue}} \times 100\%$ (after all operating expenses).