ICAG Paper 1.4 Cost & Management Accounting study plan
ICAG Paper 1.4 Cost & Management Accounting · Give each week a clear focus.
8 weeks · About 7 hours per week
Cost accounting fundamentals and cost classification
Classify costs into direct/indirect, fixed/variable/semi-variable, product/period, and relevant/irrelevant using at least 40 short scenarios.
Compute prime cost, overhead absorption rates, and cost of goods sold from raw data for 5 different manufacturing or service settings.
Explain the purpose and limitations of cost accounting in management decision making in a 150-word written summary.
Your checkpoint
A one-page cost classification cheat sheet plus 10 solved practice problems with full workings.
Cost accounting fundamentals and cost classification & Costing methods and techniques (job, batch, contract, process, standard, marginal and absorption costing)
Apply job and batch costing to prepare job cost sheets and compute unit costs for 3 batch sizes.
Distinguish contract costing from job costing and calculate contract revenue, costs, and profit using the percentage-of-completion method for 2 contracts.
Reconcile process costing with normal/abnormal losses and gains using FIFO and weighted-average methods for 2 process sequences.
Your checkpoint
A side-by-side comparison table of job, batch, and contract costing with worked numerical examples for each.
Costing methods and techniques (job, batch, contract, process, standard, marginal and absorption costing)
Prepare full absorption and marginal costing income statements for the same data and reconcile the difference in profit.
Compute and interpret overhead variances (expenditure, efficiency, capacity) and explain their causes.
Set standard costs for materials, labour, and overhead and calculate basic variances for a simple product.
Your checkpoint
A spreadsheet model that converts absorption profit to marginal profit and lists all variances with formulas.
Budgeting, budgetary control and standard costing with variance analysis
Construct a cash budget, production budget, and purchases budget from a set of forecast sales and inventory policies.
Analyse a budgetary control report and identify corrective actions for three significant variances.
Explain the behavioural and motivational aspects of budgeting in a 200-word memo.
Your checkpoint
A complete master budget pack for a fictional 6-month period, including all supporting schedules and a variance commentary.
Budgeting, budgetary control and standard costing with variance analysis
Calculate and interpret all labour, material, and sales variances, including mix and yield variances.
Prepare a standard costing operating statement that reconciles budgeted profit to actual profit.
Evaluate the limitations of standard costing in modern manufacturing environments.
Your checkpoint
A variance analysis report with a full operating statement and a 150-word critique of standard costing.
Decision making, performance measurement and management accounting control systems
Apply relevant costing to make or buy, accept or reject special order, and discontinue product decisions using 6 case scenarios.
Use limiting factor analysis and linear programming (graphical method) to determine an optimal product mix.
Evaluate pricing decisions using cost-plus, marginal cost, and market-based approaches.
Your checkpoint
A decision-making case portfolio containing 5 solved scenarios with recommendations and supporting calculations.
Decision making, performance measurement and management accounting control systems
Compute and interpret return on investment, residual income, and economic value added for two divisions.
Design a balanced scorecard with objectives, measures, targets, and initiatives for a service company.
Identify and explain dysfunctional behaviour arising from performance measurement systems in a 200-word analysis.
Your checkpoint
A divisional performance report with ROI/RI/EVA calculations and a balanced scorecard for a chosen company.
Cost accounting fundamentals and cost classification & Costing methods and techniques (job, batch, contract, process, standard, marginal and absorption costing) & Budgeting, budgetary control and standard costing with variance analysis & Decision making, performance measurement and management accounting control systems
Complete a timed 50-question mock exam covering all domains and score at least 70%.
Review all incorrect mock answers and produce a personalised list of weak topics with corrective actions.
Summarise key formulas and concepts from all domains into a two-page revision sheet.
Your checkpoint
Mock exam score report plus a two-page revision sheet and a 1-week action plan for final review.
Milestones
Week 2: Achieve at least 80% on a 20-question quiz covering cost classification and job/batch/contract costing.
Week 4: Produce a complete master budget with all supporting schedules and explain three variances correctly.
Week 6: Correctly solve 4 out of 5 relevant costing decision scenarios without referring to notes.
Week 8: Score 70% or higher on the full mock exam and complete the personalised revision sheet.