Checklist for all students,know yourself..your first step for preparedness for Exam.. ✍️ yes or no for each point.. please co-operate..so that I can help you...this efforts help you to grab success in Exam confidently..
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1️⃣ Cost Concepts & Cost Classification (VERY IMPORTANT)
Types of Costs
• Fixed, Variable, Mixed (Semi-variable)
• Step fixed cost
• Committed vs Discretionary fixed cost
• Relevant vs Irrelevant cost
• Sunk cost ❌ (never relevant)
• Opportunity cost ✔️ (always relevant)
• Differential / Incremental cost
• Avoidable vs Unavoidable cost
• Explicit vs Implicit cost
• Economic cost = Explicit + Implicit
🔑 Exam trap: Book value ≠ relevant cost
2️⃣ Cost Behavior & Cost Estimation
Methods
• High–Low method (most tested)
• Scatter graph
• Least squares regression (conceptual)
Key terms
• CM ratio
• Relevant range
3️⃣ Cost–Volume–Profit (CVP) Analysis ⭐⭐⭐
Core formulas
• BEP (units) = Fixed Cost ÷ CM per unit
• BEP (sales) = Fixed Cost ÷ CM ratio
• Target profit analysis
• Sales mix (weighted CM)
Concepts tested
• Impact of price change
• Impact of fixed cost increase
• Assumptions of CVP
🔑 CMA favorite: Multi-product BEP
4️⃣ Job Costing vs Process Costing
Job Order Costing
• Direct material
• Direct labor
• Manufacturing overhead (applied)
• Predetermined overhead rate
Process Costing
• Weighted Average vs FIFO
• Equivalent units (EUP)
• Normal vs abnormal loss
🔑 FIFO gives higher cost in inflation
5️⃣ Activity-Based Costing (ABC) ⭐⭐⭐
Key terms
• Activities
• Cost pools
• Unit-level, Batch-level, Product-level, Facility-level
Exam focus
• Overcosting vs Undercosting
• When ABC is preferred
• Difference between ABC vs Traditional costing
6️⃣ Absorption vs Variable Costing ⭐⭐⭐
Differences tested
Item Absorption Variable
Fixed MOH Product cost Period cost
Inventory Higher Lower
Income Depends on inventory change Sales driven
🔑 Inventory ↑ → Absorption profit ↑
7️⃣ Standard Costing & Variance Analysis ⭐⭐⭐⭐
Material Variances
• Price variance
• Quantity (efficiency) variance
• Mix & Yield variance
Labor Variances
• Rate variance
• Efficiency variance
Overhead Variances
• Variable OH: Spending & Efficiency
• Fixed OH: Spending & Volume
• Flexible budget variance
🔑 Who is responsible?
• Price → Purchasing
• Efficiency → Production
8️⃣ Responsibility Accounting & Performance Measurement
Responsibility centers
• Cost center
• Revenue center
• Profit center
• Investment center
Performance measures
• ROI
• Residual income
• ROA
• Balanced Scorecard (Financial & Non-financial)
🔑 Residual income avoids under-investment
9️⃣ Budgeting & Forecasting ⭐⭐⭐
Types of budgets
• Operating budget
• Capital budget
• Cash budget
• Flexible budget
Budgetary control
• Static vs Flexible budget variance
🔟 Decision-Making Techniques (Highly Tested)
Decisions
• Make or buy
• Special order
• Shutdown vs continue
• Sell or process further
• Product mix (limiting factor)
Key principle
➡️ Only relevant costs & revenues matter
1️⃣1️⃣ Transfer Pricing
Methods
• Market price
• Cost-based
• Negotiated price
🔑 Goal congruence is the key concept
1️⃣2️⃣ Capacity Management & Throughput
• Theoretical capacity
• Practical capacity (used for OH rate)
• Normal capacity
• Throughput contribution
• Bottleneck analysis
1️⃣3️⃣ Lean Accounting & Modern Concepts
• Just-in-Time (JIT)
• Target costing
• Total Quality Management (TQM)
• Value chain analysis
🔑 FINAL EXAM STRATEGY (US CMA)
• CMA tests logic more than formulas
• Identify relevant cost
• Watch inventory movement
• Variances → cause & responsibility
• CVP → assumptions always tested
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