Unit 9: Management Accounting: Costing
and Budgeting
Learning hours: 60
NQF level 4: BTEC Higher National — H1
Description of unit
In this unit learners will consider cost information both current and future. Cost data will be collected, compiled and analyd, and will be procesd into information of u to management. The unit goes on to deal with budgetary planning and control, preparing forecasts and budgets and then comparing them to actual results. Learners will consider different costing and budgetary systems and will discuss the caus of resulting variances.
Summary of learning outcomes
To achieve this unit a learner must:
1 Collect and analy cost information within a business
2 Propo methods to reduce costs and enhance value within a business
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3 Prepare forecasts and budgets for a business
4 Monitor performance against budgets within a business.
Content
1 Cost information
Types of costs and classification: materials, labour, overheads, direct and indirect, fixed, variable and mi-variable
Costing methods: job costing, batch costing, process costing, contract costing, rvice
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Cost measurement: absorption and marginal costing, traditional overhead absorption and activity-bad costing, stock valuation methods (FIFO, LIFO, AVCO, standard costing)
Costing as basis for pricing and stock valuation: cost plus pricing, market pricing, target costing
Data collection and analysis: sampling methods and purpo, prentation of data eg
tabular, diagrammatical, graphical, index numbers
2Reduce costs and enhance value
Cost reports: preparation, comparison with other data, explanation of implications
Performance indicators: monitor and asss to identify potential improvements
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Quality and value: definitions and interaction, added value, total quality management
3Forecasts and budgets
The budgeting process: purpo, benefits, links with organisational objectives/strategy, the budget manual, budgets as planning, coordinating, motivation and control devices
Budget preparation: limiting or key factors, master, subsidiary and functional budgets, cash budgets, the preparation of sales budget, debtors’ budgets, creditors’ budgets production cost, raw materials and finished goods budgets泰国传奇
Budgeting methods: incremental, zero-bad, fixed and flexible
Behavioural conquences of budgets: padding the budget, spending to budget, creative budgets
4Performance against budgets
Variances: types, analysis, calculation, possible caus, corrective action
Reporting: operating statement, reconciliation of budgeted and actual results
Responsibility centres: relevance to budgeting, identification of responsibility for variances 108
B014393 – Guidance and units – Edexcel Level 4 BTEC Higher Nationals in Business
Outcomes and asssment criteria
新手钓鱼Outcomes Asssment criteria for pass
To achieve each outcome a learner must demonstrate
the ability to:
1 Collect and analy cost
information within a
公积金全额提取business •identify and classify different types of cost •explain the need for, and operation of, different costing methods
•calculate costs using appropriate techniques •collect, analy and prent data using appropriate techniques
2 Propo methods to reduce
costs and enhance value
within a business •prepare and analy routine cost reports •calculate and evaluate indicators of productivity, efficiency and effectiveness
•explain the principles of quality and value, and identify potential improvements
3 Prepare forecasts and
budgets for a business •explain the purpo and nature of the budgeting process
•lect appropriate budgeting methods for the organisation and its needs
•prepare budgets according to the chon budgeting method
•prepare a cash budget
4 Monitor performance
against budgets within a
business •calculate variances, identify possible caus and recommend corrective action
•prepare an operating statement reconciling budgeted and actual results
•report findings to management in accordance with identified responsibility centres
Guidance
Delivery
Learners should be expod to as many ca studies and practical exercis as possible, especially in relation to the costing, forecasting and budgeting techniques. Role play may help to explore the interaction between different managers that is an esntial part of the budgeting process.
Asssment
郑州市安全教育平台Asssment may be in the form of assignments, or ca studies investigating real or simulated organisations.
Links
The unit links with others within the specification: Unit 2: Managing Financial Resources and Decisions, Unit 6: Business Decision Making, Unit 10: Financial Reporting, Unit 11: Financial Systems and Auditing and Unit 12: Taxation.
Additionally it covers much of the underpinning knowledge and understanding for the following units of the NVQ in Accounting at level 4: Unit 8: Contributing to the Management of Costs and the Enhancement of Value and Unit 9: Contributing to the Planning and Allocation of Resources.
The unit covers topics esntial to learners aiming for a career in this field and wishing to become m
embers of professional accounting bodies.
Support materials
Textbooks
Sufficient library resources should be available to enable learners to achieve this unit. Particularly relevant texts are:
Brammer J and Penning A — Managing Costs and Resources (Osborne Books, 2001)
ISBN: 1872962440
Jones M — Accounting for Non-Specialists (Wiley, 2002) ISBN: 0471495727
Journals and newspapers
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The financial and mainstream press can be a uful source of information, both in terms of data for ca studies and background understanding.
Videos
A variety of videos is available covering financial topics.
110
B014393 – Guidance and units – Edexcel Level 4 BTEC Higher Nationals in Business
Websites
The professional accountancy bodies all have websites with uful information and many links. The sites associated with accounting journals can also be of u, together with the biz/ed site, which provides numerous resources for learners and teachers.
uk The Association of Accounting Technicians uk Accounting Technician magazine
www.bized.ac.uk provides ca studies appropriate for
educational purpos
www.iasb.uk International Accounting Standards Board
