Cost units. Cost centres. Cost classification into direct or indirect by function, or into cost behavior categories. Elements of cost. Coding. Graphical representation of cost / volume relationships.

Ordering, receiving, inspection, storage and issue procedures. Documents involved in stores routine. Perpetual inventory records. Continuous stock taking and treatment of discrepancies. Methods of pricing stores issues and effect on reported profits. Maximum stock, minimum stock and re-order levels.

Time and output records. Methods of remuneration and effect on unit cost. Payroll preparation and wages analysis. Treatment of overtime premium, shift premium and idle time.

Main sources of total overhead, including depreciation, using a fixed assets register. The calculation of the depreciation charge. Use of production and service cost centres. Allocation. Apportionment. Re-apportionment of service cost centres. Basis for and calculation of absorption rates. Use of absorption rates. Under or over absorption.

Specific orders

Job, batch and contract. Continuous processes

Normal loss. Scrap value. Abnormal loss or gain. Work-in-progress. Equivalent units. Joint products. By-products.

Provision of services

Service organisations, both internal and external.

Elementary knowledge of the use of contribution for decisions and the effect on stock values and reported profits.

Elementary knowledge of budgeting control and standard costing restricted to prime cost variance analysis.

Simple examples of integrated accounting systems.

The calculations of quantity and cost of materials. Yield, using materials from stock, the standard hour, absorption of overheads, activity based costing (ABC). Apportionment of joint process costs.

Use of free stock balance. Calculation and use of economic order quantity (EOQ).

Distinction from the absorption costing principle, particularly as to the effect on stock valuations and reported profits.

Relevance and use of contribution as a basis for various decisions, particularly with reference to limiting factors. Opportunity costs. Avoidable costs. Sunk costs. Calculation of break-even points. Break-even charts involving traditional, contribution and profit volume (P/V) presentations. Limitations of break-even analysis.

Preparation and co-ordination of functional, cash and master budgets. Limiting factor. Fixed and flexible budgets.

Setting standard costs. Types of standard. Comprehensive sales and production cost variance analysis, including mixture variances. Calculation and relevance of control ratios - activity, capacity and efficiency.

Interlocking and integrated accounting systems. Use of control accounts. Reconciliation and causes of different profits.