CMA Management Tools -Understanding Cost Management Concepts
- 2.5 hours on-demand video
- 35 downloadable resources
- 2 Practice Tests
- Full lifetime access
- Access on mobile and TV
- Certificate of Completion
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- The different types of cost categories - Direct Vs Indirect; Product vs Period; Direct material, Direct labor and Overhead
- Costing accounting systems- Job cost,and Activity Based Costing
- Activity Based Management - an extension of the Activity based Costing model
- Understand how different costs behave as business activity increases. Fixed Costs. Variable costs and Mixed costs.
- Be able to use the cost/volume/profit model to predict future profits.
- Understand how senior management determines the companies cost structure.
- Know how to calculate a companies Degree of Operating Leverage and why it is important for profit planning
- Some knowledge of business operations
- Some knowledge of excel
Learn and Master Management Accounting Tools and Techniques on
Cost Management (20% - Levels A, B, and C)
This course is a very comprehensive review of the many Cost Management issues that are tested by the Institute of Management Accountants on their Certified Management Accounting exams. The course covers the five subtopics such as
1. Measurement concepts a. Cost behavior and cost objects b. Actual and normal costs c. Standard costs d. Absorption (full) costing e Variable (direct) costing f. Joint and by-product costing
2. Costing systems a. Job order costing b. Process costing c. Activity-based costing d. Life-cycle costing
3. Overhead costs a. Fixed and variable overhead expenses b. Plant-wide versus departmental overhead c. Determination of allocation base d. Allocation of service department costs
4. Supply Chain Management a. Lean manufacturing b. Enterprise resource planning (ERP) c. Theory of constraints and throughput costing d. Capacity management and analysis
5. Business process improvement a. Value chain analysis b. Value-added concepts c. Process analysis d. Activity-based management e. Continuous improvement concepts f. Best practice analysis g. Cost of quality analysis h. Efficient accounting processes
Each section contains an overview lecture. Each Learning Outcome that could be on the test is covered in detail with study notes provided and quizzes that contain past CMA exam questions on that section.
To be successful writing the CMA, you must practice, practice and practice. This course requires that of you.
- Business Managers
- Business Students
- CMA Candidates
An overview of the three main roles a manager must perform and how the tools that help him/her manage are what management accounting is all about.
There are three categories of Manufacturing Costs - Direct Material, Direct Labour and Manufacturing Overhead.
A Cost Accounting System that accumulates and assigns the three manufacturing costs - Direct Material, Direct Lbor and Manufacturing Overhead to the "job". A job can be one desk or an order for a hundred desks.
Activity Based Costing is a new concept in cost accounting. The product costs of Direct Material and Direct labour are traced to the product but the indirect manufacturing overhead costs are assigned to production activities and then to the product depending on the number pf activities performed on the product.
Total costs is the sum of total variable costs and total fixed costs, so breakeven point is the output level at which total contribution margin equals total fixed costs. But businesses are in business to make a profit, not to break even, so it is important to determine what level of activity is required to realize a specific income
A. Contribution margin (CM) = Total Revenues (Rev) – Total Variable Costs (VC).
CM (per unit) = Unit Selling Price – Unit Variable Costs.
CM (% Sales) = Unit CM/Unit Selling Price.
CM (total) = Sales Revenues – Variable Costs
Breakeven Point (BEP) = Fixed Costs ÷ Contribution Margin
TOI Point = (Fixed Costs + TOI) ÷ Contribution Margin
CVP analysis is used by managers for more than just the initial determination of breakeven point or the activity level required for a specified target income. CVP analysis also helps managers in the decision-making process by allowing them to see how proposed changes in selling price and cost structure affect the breakeven point and target-income activity level.
CVP analysis is used by managers as a “what-if” sensitivity-analysis tool to determine how sensitive the model is to changes in the predicted data or if a key assumption changes. For example, what is the impact on operating income if sales are 5% less than expected, or if variable cost per unit increases by 5%?
Senior management spends a lot of time determining what the companies cost structure should be. Know why this is important.
The typical product cost structure includes both fixed and variable costs. A higher percentage of fixed costs in the cost structure involves more risk or operating leverage but also results in greater operating income at higher activity levels than would a cost structure that had a higher proportion of variable costs. CVP analysis quantifies the income impact of proposed changes in the relative proportion of fixed and variable costs.