HKICPA QP Module 2 Management Accounting - independent subject foundations cheat sheet

Contribution = sales − variable costs; profit = contribution − fixed costs

Break-even units = fixed costs ÷ contribution per unit

Relevant costs are future, incremental and differ between alternatives

Predetermined overhead rates use budgeted overheads and budgeted activity

Cash budgets exclude depreciation but include capital expenditure

Define incremental cash flows and the valuation date.

Discount rate, cash-flow timing and risk assumptions must be consistent.

NPV, IRR, payback and accounting return measure different things.

Expected value does not eliminate downside or estimation uncertainty.

Supplied model rates are not current market or tax facts.