ACCN4 - Revision Guide

ACCN4 - Revision Guide

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ACCN4 - Further Aspects of Management Accounting



ACCN4 - Further Aspects of Management Accounting
Chapter 1 ­ Manufacturing Accounts
What is a manufacturing account?
A retailer buys and sells completed products, whereas a manufacturer has to produce the products to sell.
A manufacturing account is therefore prepared to show all…

Page 2

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ACCN4 - Further Aspects of Management Accounting


X
Closing inventory (stock) of finished goods (X)
Cost of sales (cost of goods sold) (X)
Gross Profit X


How is inventory recorded in the balance sheet of the manufacturer compared to the retailer?
There are three types of inventory within the manufacturing…

Page 3

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ACCN4 - Further Aspects of Management Accounting






Chapter 2 - Marginal Costing
Marginal costing is costing method which only considers marginal costs, which are those costs that are incurred when one extra unit is
produced, for example direct costs.
Direct Costs ­ are those costs which can be identified with…

Page 4

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ACCN4 - Further Aspects of Management Accounting



Margin of Safety
The margin of safety I the amount of units between the amounts of revenue (sales) made and the amount need to break-even where the
amount of revenue (sales) exceeds the break-even point.
MARGIN OF SAFTEY ­ the difference between the…

Page 5

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ACCN4 - Further Aspects of Management Accounting


8. Complete the chart by identifying the profit and loss areas.






















The Chart can be used to graphically use to illustrate:

The break-even point where the total cost cross total revenues.
The margin of safety being the difference between the break-even point and…

Page 6

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ACCN4 - Further Aspects of Management Accounting


Businesses are often faced with a choice of satisfying customer demand with inventory made bought in as it is unable to produce the
goods required by itself.
On a purely financial basis the decision whether to make or buy in should be based…

Page 7

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ACCN4 - Further Aspects of Management Accounting




Use of overhead absorption rate
Once the OAR has been calculated it is possible to calculate the full cost of the unit.



Chapter 4 ­ Activity based costing
Activity based costing?
This type of costing was developed as an alternative to absorption costing.…

Page 8

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ACCN4 - Further Aspects of Management Accounting




Chapter 4 ­ Standard costing and variance analysis
What is standard costing?
Standard costing is the preparation and use of costs which should be achieved with efficient working conditions and manufacturing
performance. These costs ought to be achieved and are called standard costs.…

Page 9

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ACCN4 - Further Aspects of Management Accounting


A manager will usually will look into the possible causes of an adverse variance as this decrease profit. A favourable variance will increase
profit, but if there is a large favourable variance it may still need to be investigated as it could be…

Page 10

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ACCN4 - Further Aspects of Management Accounting


No overtime or bonuses.

Lower-skilled workforce.
Lower quality of materials.
Unfavourable working
conditions.
Lack of training.
Labour Efficiency ADVERSE More hours used for production. Lack of supervision.
Works to rule/strikes (if paid).
Machine breakdowns.
Lack of materials/orders.

Too many unproductive hours,
e.g. coffee…

Comments

Lilian

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Hi,

Does this revision guide cover the AQA specification?

Paulinho

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Yeah fam it also covers me

Lily_Annm

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Has anybody got something similar to this but for UNIT 3 please?!? 

Lornam

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hey...this is really useful thanks....

ja1uli_10

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ygm

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