Management Accounting: Costing

Chanaat

Hello All,

This question is for those who are studying this module and who had successfully passed this module.

Which was your most difficult topic under this module?
How did you learn the topic to understand better, like did you refer to any online resources or any other sources?

Can you please share your method of studying here.

I find Activity Based Costing quite difficult to understand. I need more practice questions to understand the costing approach.
Any suggestions where to find more test questions on this topic?

Thanks
Chan

Accounting1234

I did quite well on this unit so might be able to help.

What is it in particular you’re struggling with?

As far as I’m aware the differences are:

Prime cost: Labour & direct costs
Marginal Cost: Labour & direct & Variable overheads (think what an extra unit would cost - I.e. marginal)
Absorption - labour + direct + variable + (fixed overheads / budgeted units)
ABC Costing - cost pool (such as electricity of £2000) then you have cost drivers (such as how many times you turn the electric on or ‘lights on’). Say you have 200 lights to switch on between two products, product A & B. A uses 150, B uses 50. So you divide the £2000 cost pool (electricity) by 200 (cost drivers) then times by 150 and 50 to get product A’s cost & product B’s cost.

That is basically ABC costing as best as I can explain/how I learned it.


ABC positives: more accurate, can make more informed decisions
Negatives: can be tedious as takes longer, does the cost of doing it outweigh the benefit?

As for method of studying / resources.. I think for this unit I just followed the book and managed to somehow get a really good mark.
AAT green light tests are helpful as well as the practise assessments on there. You can buy books with loads of study questions I believe. Kaplan should do them.
But for all my units now I use Anki & spaced repetition and I’m yet to fail one so really recommend it.

Hope that helps & good luck

Chanaat

@Accounting1234, Thanks for sharing. Sorry for my late reply.
In ABC costing, I find identifying the correct cost drivers for the cost pool is a little tricky. Moreover the book I am following does not provide many QandA to practice. BTW, congrats on scoring good marks in this module.


Chan

AmberH94

I’ve just taken the management costing exam a couple of hours ago!

I stressed a lot about all the different calculations and making sure I memorised everything. But a lot of the questions were just common sense.

Make sure you know whether the question is asking for a UNIT or a TOTAL.

I did struggle with task 10 as their wordings of questions confused me. I could of benefited from more knowledge on IRR but overall I found the exam more simple then the others.

I haven’t got my results yet which is weird as they are normally instant not sure if there is a back log/delay ..

Chanaat

@AmberH94 Thank you for the response.