1

agement Accounting

signed to help nd to provide detailed

d in tion session.

AND

apers

s eding oerpinne

nce . Thes

r paperh other

en the accounting aninks between these are sho

as dotted line arrows. This diagram indicates wheknowledg previous

the syllabus

of the the broadest sense the

ral mai the syllabus and study

guide into discrete sections. Relational diagram of the main capabilities This diagram illustrates the flows and links between the main capabilities (sections) of the syllabus and should be used as an aid to planning teaching and learning in a structured way.

Syllabus rationale

the syllabus is ties are linked.

The rationale also explains in further detail what the ination intends to assess and why.

This shows the breakdown of the main capabilities abus into subject areas. This is

the blueprint for the detailed study guide.

ing the syllabus This section briefly explains the structure of the

ssed.

at students, tuition hould use as the basis of

ials. the detail of the

ely identifies what nation session.

tion and ivided into sections

lities identified in the ivided into subject

es included yllabus. Subject areas are broken

down into sub-headings which describe the detailed ssed in examinations.

ay require students to the broad intellectual level at

monstrated

shers: BPP ishing.

Both these publishers base their study texts on the detailed contents of the study guides as published by ACCA. ACCA takes no editorial responsibility for the detailed content of these study texts although ACCA examiners will annually review their content for general appropriateness and relevance in supporting effective study towards ACCA examinations. In addition ACCA examiners will recommend other

Man

(F2) December 2009 This syllabus and study guide is dewith planning study ainformation on what could be assesseany examina

THE STRUCTURE OF THE SYLLABUSSTUDY GUIDE Relational diagram of paper with other p This diagram shows direct and indirect linkbetween this paper and other papers prec r

Study Guide following it. Some papers are directly und d by other papers such as Advanced PerformaManagement by Performance Management e This is the main document th

links are shown as solid line arrows. Othe s providers and publishers s

only have indirect relationships with eacsuch as links existing betwe d auditing papers. The l wn study guide which comprehensiv

re could be assessed in any exami

you are expected to have underpinning e The study guide is a precise reflec

and where it would be useful to reviewlearning before undertaking study. Overall aim of This explains briefly the overall objectivepaper and indicates in capabilities to be developed within the paper. Main capabilities This paper’s aim is broken down into seve n (*see intellectual levels below).

capabilities which divide

This is a narrative explaining how structured and how the main capabili

exam

Detailed syllabus

(sections) of the syll

Approach to examin

examination and how it is asse

their studies, instruction and materExaminations will be based on

breakdown of the syllabus. It is dbased on the main capabisyllabus. These sections are dareas which relate to the sub-capabilitiin the detailed s

outcomes that could be asseThese outcomes are described using verbs indicating what exams mdemonstrate, andwhich these may need to be de

Reading lists ACCA has two official publiLearning Media and Kaplan Publ

2

dents ma the

ant articles will also btant.

broadend professionaon their way

The specific capabilities within the detailed ssessed at one

e levels:

relate to theowledge

onal le

ide , or markedn ch an ar. Howe

nowledgeule and

the Professional level, some lower levelue to be assessed as the student gh each module and level. This

re will be a

casionally sed a

G HOURS The ACCA qualification does not prescribe or recommend any particular number of learning hours for examinations because study and learning patterns and styles vary greatly between people and organisations. This also recognises the wide diversity of personal, professional and educational circumstances in which ACCA students find themselves.

23 and 35 main on the nature of

the subject and how these areas have been broken

E

.

The Fundamentals level examinations contain 100% compulsory questions to encourage

readth of each

d by equivalent puter based

re all paper based -hour papers. The structure of papers varies

from ten questions in the Corporate and Business rk questions in

ividual questions between

10 and 30 marks.

all three-hour paper based examinations, all containing two

y, but there will be

apers, ACCA has d planning time.

t the beginning of allow candidates to

lanning their efore they start writing in their answer

books. This time should be used to ensure that all the information and exam requirements are properly read and understood. During reading and planning time candidates may only annotate their question paper. They may not write anything in their answer booklets until told to do so by the invigilator.

text books where appropriate, which stu y Each syllabus contains betweenread in order to widen their reading beyondapproved study texts. Relev e published in student accoun

INTELLECTUAL LEVELS The syllabus is designed to progressively and deepen the knowledge, skills an l between modules and levevalues demonstrated by the student through the qualification.

syllabuses and study guides are a of syllabus. three intellectual or cognitiv

Level 1: Knowledge and comprehension Level 2: Application and analysis Level 3: Synthesis and evaluation Very broadly, these intellectual levels threethree cognitive levels at which the Knmodule, the Skills module and the Professi vel Law (F4) paper to four 25 maare assessed. Each subject area in the detailed study guincluded in this document is given a 1, 23 superscript, denoting intellectual level, at

The Professional level papers are

the end of each relevant line. This gives aindication of the intellectual depth at whi

ationea ver,

sections. Section A is compulsorsome choice offered in Section B. For all three hour examination pintroduced 15 minutes reading an

could be assessed within the examinwhile level 1 broadly equates with the Kmodule, level 2 equates to the Skills modlevel 3 to skills can continprogresses throureflects that at each stage of study the

This additional time is allowed aeach three-hour examination toread the questions and to begin panswers b

requirement to broaden, as well as deepen capabilities. It is also possible that ocsome higher level capabilities may be asses t lower levels. LEARNIN

subject area headings depending

down.

GUIDE TO EXAM STRUCTUR The structure of examinations varies within and

ls

candidates to study across the b

The Knowledge module is assessetwo-hour paper based and comexaminations. The Skills module examinations a

Financial Management (F9). Indodule papers will attractwithin all Skills m

3

Section with all

this nts a choice of two from

ns ns, ea

Section B will offer a choice of two from three questions totallin

attracting arks.

ation

T

xaminat n techniques, s specified.

ssurance d

le ctly

ld potentially be ions..

issued or lation passed on or before 30 September

ne 1st of the ear after.

June 2009, mber 2009 (and March 2010 where

ulations issuedmbe

e above dates may be the

hen regulation or legislation has been formally approved. The term effective relates to when regulation or legislation must be applied to an entity transactions and business practices. The study guide offers more detailed guidance on the depth and level at which the examinable documents will be examined. The study guide

re be read in conjunction with the examinable documents list. =

The Essentials module papers all have a A

examinable even if the effective date is infuture.

The term issued or passed relates to w

should therefocontaining a major case study question requirements totalling 50 marks relating to case. Section B gives studethree 25 mark questions. Section A of each of the Options papers contai 50-70 compulsory marks from two questio chattracting between 25 and 40 marks.

g 30-50 marks, with each question between 15 and 25 m

The pass mark for all ACCA Qualificexamination papers is 50%. GUIDE TO EXAMINATION ASSESSMEN ACCA reserves the right to examine anything

any econtained within the study guide atsession. This includes knowledge,

io

principles, theories, and concepts a For the financial accounting, audit and a , law and tax papers except where indicateotherwise, ACCA will publish examinabdocuments once a year to indicate exawhat regulations and legislation couassessed within identified examination sess For paper based examinations regulation legis th

annually, will be assessed from Jufollowing year to May 31st of the yTherefore, paper based examinations inDeceapplicable) will be assessed on regand legislation passed on or before 30 Septe

r

2008.

Regulation issued or legislation passed in accordance with th

4

Syllabus

To develop knowledge and prepare and proceinformation to support m

MAIN CAPABILITIES

ndidates

ose of cost and

on, behaviour

ematics and

g

and standard

ques to

AIM

understanding of how to ss bas

anagement in planni nd decision-making in a variety of business contexts.

uccessful completion of this paper, ca

A Explain the nature and purp

icati

siness math

e computer spreadsheets

ountin techniques

inate budgets costing for planning, feedback and control

e management accounting techni make and support decision-making.

RELATIONAL DIAGRAM OF MAIN CAPABILITIES

On s

MA (F2)

FM (F9) PM (F5)

APM (P5)

should be able to:

management accounting B Describe costs by classif and purpose

C Apply essential bu us

AB (F1)

D Explain and apply cost acc

E Prepare and coord

ic cost and quantitative F Usng a

The nature and purpose of cost and management accounting (A)

Cost classification, behaviour and purpose

(B)

Business Mathematics and computer spreadsheets

(C)

Cost accounting techniques

(D)

Budgeting and standard costing (E)

Short-term decision- making techniques (F)

5

RATIONALE

ent ting

nd elements of management accounting which are used to make

ure and it clear

ection is cosis followed

tics ants, which are

e osts an

entraltes to

n business. It is followed by the preparation and use of budgeting

g as essential tools for plannian s finish

ement accounting in supporting decision-making.

DETAILED SYLLABUS:

A pose of cost and

ent accounting versus g

and purpose

1. Production and non-production costs

t costs

C Business mathematics and computer

spreadsheets 1. Dealing with uncertainty 2. Statistics for business 3. Use of computer spreadsheets

D Cost accounting techniques

materials

g for labour

verheads

absorption costing

5. Job and batch costing

6. Process costing

costing

eting and standard costing

of budgeting

nctional budgets

ndard costing

under absorption and marginal costing

5. Reconciliation of budgeted profit to actual t

ecision-making techniques 1. Cost-volume-profit analysis 2. Relevant costing 3. Limiting factors

The syllabus for Paper F2, ManagemAccounting, introduces candidates to cosprinciples and techniques, a

and support decision-making. The syllabus starts by introducing the natpurpose of cost accounting, distinguishingfrom financial accounting. The next sclassification and behaviour. This immediately by applied business mathemathe use of computer spreadshee

ly t

d

essential for candidates to understand thmeasurement and behaviour of business cto be able to classify them accordingly. The next area of the syllabus represents a cpart of this paper and it introduces candidavariety of costing techniques used i

d

1. Nature and purpose a

2. Fu

and standard costin ng es

3. Flexible budgets and sta d controlling business costs. The syllabu

with an introduction to the use of manag

The nature and pur

management accounting

1. Accounting for management

2. Cost and managemfinancial accountin

B Cost classification, behaviour

2. Direct and indirec

3 Fixed and variable costs

1. Accounting for 2. Accountin

3. Accounting for o 4. Marginal and

7. Service/operation

E Budg

4. Basic variance analysis

profi F Short-term d

6

APPROACH TO EXAMINING THE SYLLABUS

s will ill include both

tional elements. The examination will consist of 40 two-mark questions, and 10 one-mark questions.

The syllabus is assessed by a two hour paper-based or computer-based examination. Questionassess all parts of the syllabus and wcomputational and non computa

7

Study Guide A POSE OF COST AND

UNTING

) [1]

good

) of plannin

.[1]

d nce between strategic, tactical and operational planning.[1]

e) vestment and revenue centres.[1]

f) fering needs for information of cost, profit, investment and revenue centre

2 nd management accounting versus

financial accounting

a) cost and

tion’s management information system.[1]

ng nting.[1]

UR AND

costs

a) Explain and illustrate production and non-

production costs.[1]

b) Describe the different elements of production

cost - materials, labour and overheads.[1] c) Describe the different elements of non-

production cost – administrative, selling, distribution and finance.[1]

e distinction nd non-production costs

ing output and inventories.[1]

tween direct and indirect costs in ufacturing

b) Identify examples of direct and indirect costs in manufacturing

ustrate the concepts of cost centres.[1]

3. Fixed and variable costs

different types of cost behaviour.[1]

mples of costs that fall , stepped fixed and

Use high/low analysis to separate the fixed and variable elements of total costs including

ixed costs and nges in the variable cost per unit.[2]

d) Explain the structure of linear functions and

ICS AND COMPUTER

Dealing with uncertainty

expected value.[1]

b) Demonstrate the use of expected values in

simple decision making situations.[1]

c) Explain the limitations of the expected value

technique.[1] (Decision trees and conditional profit tables are excluded).

THE NATURE AND PURMANAGEMENT ACCO

1. Accounting for management a Distinguish between data and information.

manufacturing and non-manorganisations.[1]

b) Identify and explain the attributes of

information.[1]

c Outline the managerial processesdecision making and control

g,

) Explain the differe

Distinguish between cost, profit, in

Describe the dif

managers.[1]

. Cost a

Describe the purpose and role of

management accounting within an organisa

b) Compare and contrast financial accounti

with cost and management accou

B COST CLASSIFICATION, BEHAVIOPURPOSE

1. Production and non-production

d) Explain the importance of thbetween production awhen valu

2. Direct and indirect costs a) Distinguish be

manufacturing and non-organisations.[1]

c) Explain and ill

objects, cost units and cost

a) Describe and illustrate, graphically,

b) Explain and provide exa

into the categories of fixedvariable costs.[1]

c)

situations involving stepped fcha

equations.[1]

C BUSINESS MATHEMATSPREADSHEETS

1.

a) Explain and calculate an

8

2. Statistics for business

a) oefficient and a

b) Explain the concepts in (a) and interpret the

n using regression

analysis and interpret the results.[2]

3 spreadsheets ) puter

[

b ding of the use of computer spreadsheets.[1]

for computer spreadshein cost and management accounting.[1]

D

a)

documents necessary for the ordering, receiving tory.[1]

sed to

nd to discrepancies and losses.[1]

) es in the

al inventory account.[1]

d te the costs of ordering and holding inventory (including bu r

e) mal reorder

quantities.[2] f) Calculate and interpret optimal reorder

quantities when discounts apply.[1]

g) Produce calculations to minimise inventory

costs when inventory is gradually replenished.[1]

priate methods for reorder levels where demand in

time is constant.[1]

r

a) Calculate direct and indirect costs of

relate input labour ne.

er entries to record

outputs.[1]

tion methods: time-s, piecework systems and

individual and group incentive schemes.[1]

n analyse the costs and urnover.[1]

f) Explain and calculate labour efficiency, d production volume ratios.[1]

e labour account. [1]

nt of direct and

s involved in

erhead absorption

ction overheads to centres using an appropriate basis.[1]

cost centre costs to

s (using the reciprocal method where service cost centres work for

e) Select, apply and discuss appropriate bases for absorption rates.[2]

f) Prepare journal and ledger entries for

manufacturing overheads incurred and absorbed.[1]

g) Calculate and explain the under and over

absorption of overheads.[1]

Calculate a correlation c

coefficient of determination.[1]

coefficients calculated in (a).[1]

c) Establish a linear functio

. Use of computer

a Explain the role and features of a comspreadsheet system. 1]

) Demonstrate a basic understan

c) Identify applications ets causes of labour t

COST ACCOUNTING TECHNIQUES

1. Accounting for materials

Describe the different procedures and

and issuing of materials from inven

b) Describe the control procedures umonitor physical and ‘book’ inventory aminimise

c Interpret the entries and balancmateri

) Identify, explain and calcula

ffeinventory).[1]

Calculate and interpret opti

h) Describe and apply approestablishingthe lead

2. Accounting for labou

labour.[1] b) Explain the methods used to

costs to work do [1]

c) Prepare the journal and ledglabour cost inputs and

d) Describe different remunera

based system

e) Calculate the level, a d

capacity an g) Interpret the entries in th

3. Accounting for overheads

a) Explain the different treatmeindirect expenses.[1]

b) Describe the proceduredetermining production ovrates.[1]

c) Allocate and apportion produ

cost

d) Reapportion service production cost centre

each other).[2]

9

h) ating non-production [1]

a) Explain the importance of, and apply, the

b) Demonstrate and discuss the effect of

ventorprofit determination.[2]

) n and

d es calculated unabsorption and marginal costing.[2]

) antages tion and marginal costing.

) d batch

e of job or

batch costing would be appropriate.[1]

nts in job and costing situations.

formation.[1]

a) Describe the characteristics of process

[1] c) Explain the concepts of normal and abnormal

losses and abnormal gains.[1] d) Calculate the cost per unit of process

outputs.[1] e) Prepare process accounts involving normal and

abnormal losses and abnormal gains.[1]

f) Calculate and explain the concept of equivalent

nsfers out of a process using the weighted average and FIFO

where [2]

i) Prepare process accounts where losses and nt stages of the

process.[1]

ucts and joint products.[1]

int products at the [1]

l) Prepare process accounts in situations where and/or joint products occur. [2]

-process and losses in

sting

a) Identify situations where the use of ppropriate.[1]

st measures that may be used in different service/operation

simple service

E BUDGETING AND STANDARD COSTING

1 Nature and purpose of budgeting a) Explain why organisations use budgeting.[1] b) Explain the administrative procedures used in

the budgeting process.[1] c) Describe the stages in the budgeting process.[1]

Apply methods of rel

overheads to cost units. 4. Marginal and absorption costing

concept of contribution.[1]

absorption and marginal costing on invaluation and

y

c Calculate profit or loss under absorptiomarginal costing.[2]

) Reconcile the profits or loss der

k) Value by-products and jo e Describe the advantages and disadv

absorp [1]

of point of separation.

5. Job and batch costing

a Describe the characteristics of job ancosting.[1]

b) Describe the situations where the us

c) Prepare cost records and accou

batch [1]

d) Establish job costs from given in situations.[1]

6. Process costing

costing.[1]

b) Describe the situations where the use of process costing would be appropriate.

units.[1] g) Apportion process costs between work

remaining in process and tra

methods.[2] h) Prepare process accounts in situations

work remains incomplete.

gains are identified at differe

j) Distinguish between by-prod

by-products

(Situations involving work-inthe same process are excluded). 7. Service/operation co

service/operation costing is a b) Illustrate suitable unit co

c) Carry out service cost analysis in

industry situations.[1]

.

10

2. Functional budgets

dget factor’.[1]

udgets for sales, production, materials (usage and purchases), labour and

) flexed

s.[1]

of standa

c) standard cost per unit under absorption and marginal costing.[1]

4 absorption an

a) the following variances: [1]

iii) Labour total, rate and efficiency expenditure and

efficiency and,

capacity and

b) Interpret all the variances in 4(a).[1]

c) s of all the variances in

d) Describe the interrelationships between the

5. Reconciliation of budgeted profit and actual

profit a) Reconcile budgeted profit with actual profit

under standard absorption costing.[1] b) Reconcile budgeted profit or contribution with

actual profit or contribution under standard marginal costing.[1]

HORT-TERM DECISION-MAKING TECHNIQUES

alysis

a) Calculate and interpret a break-even point and

tanding of, and use, the rofit or revenue and a

es ratio.[2]

c) Identify the elements in traditional and ven charts and

profit/volume charts.[1]

ply CVP analysis to single-product situations.[2]

arts and profit/volume charts are excluded).

costing

levant costing.[1]

for materials, labour and overheads.[2]

ulate the relevant costs associated with

ts.[1]

ept of opportunity

a) Identify a single limiting factor.[1]

production plan where an organisation is restricted by a single limiting

a linear programming problem involving two variables.[1]

d) Determine the optimal solution to a linear

programming problem using a graphical approach.[1]

e) Use simultaneous equations, where

appropriate, in the solution of a linear programming problem.[1]

a) Explain the term ‘principal bu b) Prepare b

overheads.[1]

3. Flexible budgets and standard costing

a Explain and prepare fixed, flexible andbudget

b) Explain the purpose and principlescosting.[1]

rd contribution break-e

Establish the

. Basic variance analysis under d (Multi-product break-even ch

marginal costing

Calculate i) Sales price and volume

total, price and usage ii) Materials

iv) Variable overhead total,

v) Fixed overhead total, expenditurewhere appropriate, volume, c) Calc

efficiency.

Explain possible cause

4(a).[1]

variances in 4(a).[1]

e) Calculate actual or standard figures where the variances in 4(a) are given.[1]

F. S

1. Cost-volume-profit (CVP) an

a margin of safety.[2] b) Demonstrate an unders

concepts of a target pcontribution to sal

d) Ap

2. Relevant a) Explain the concept of re

b) Calculate the relevant costs

non-current asse

d) Explain and apply the conccost.[1]

3. Limiting factors

b) Determine the optimal

factor.[2] c) Formulate

11

READING LIST

blishers:

a Contact number: +44(0)20 8740 2222

ACCA’s official pu BPP Learning Medi

Website: www.bpp.com Kaplan Publishing

Website: www.kaplanpublishing.co.ukContact number: +44(0)118 989 0629

Additional reading:

C. Drury, Management and Cost Accounting (6th 80-028-8

International

edition), Thomson, 2004. ISBN 1-844 Alternative reading: Accountancy Tuition Centre (ATC) Contact info@atc-global.com Website: www.atc-global.com Get Through Guides Contact number: +44 (0)845 257 5729 Website: www.GetThroughGuides.com International Financial Publishing Limited Contact number: +44 (0)1344 751674 Website: www.ifpbooks.com Wider reading, including relevant articles in ACCA’s Student Accountant, and other management accounting journals is encouraged.