P1

Question 1

What is a behaviour category?

Answer 1

Fixed stepped semi variable

Question 2

What is element category

Answer 2

Materials labour

Question 3

What is nature category

Answer 3

Direct indirect

Question 4

What is purpose of Management accounts

Answer 4

Planning control and decision making

Question 5

What are the 3 levels of decision making

Answer 5

Strategic, tactical, operational

Question 6

What is a cost pool

Answer 6

Activity that incurs costs

Question 7

What is a cost driver

Answer 7

Absorbs pools into units
Link between activity and cost units

Question 8

What is continous costing

Answer 8

Similar products or services are produced as a result of a sequence of continuous operations

Question 9

What are two key impacts of throughput accounting?

Answer 9

Inventory valuation - inventory valued at purchase cost of bought in goods
Decision making - max measure of throughput contribution

Question 10

What is functional services

Answer 10

Needed to execute features of app e.g. notifications, chat

Question 11

What is admins services

Answer 11

User friendly admin dashboard, more difficult cost to anticipate

Question 12

What is infrastructure cost

Answer 12

Where app is hosted, data stored and delivered

Question 13

What is a digital costing system

Answer 13

Involves linking systems with suppliers, customers

Question 14

What is a benefit of sales mix variance?

Answer 14

Identify trends in sales

Question 15

What is a Pro of sales quantity variance?

Answer 15

Indicate changes in size of market, change in market share

Question 16

What is a sensitivity analysis

Answer 16

Revising one key assumption to examine impact on the budget

Question 17

What is stress testing

Answer 17

Examine how budget performs under pressure

Question 18

What is beyond budgeting

Answer 18

Greater use of rolling budgets, non financial targets, budgets set locally

Question 19

What is the limitations of linear regression?

Answer 19

Assumes relationship between variables
Measures relationships between two variables

Question 20

What is a time series analysis

Answer 20

Uses moving averages to create a trend line over time

Question 21

What is cyclical variations

Answer 21

Cycle of booms and slumps

Question 22

What is season variations

Answer 22

Regular variations around trend over a fixed period of time

Question 23

What is residual variations

Answer 23

Irregular, random fluctuations in data

Question 24

How do you calculate trend

Answer 24

High low
Linear regression
Moving averages

Question 25

How to calculate seasonal variations

Answer 25

Difference between trend and actual

Question 26

What are committed costs?

Answer 26

Costs will be incurred in future but as a result if a past decision

Question 27

When does the optimal solution occur

Answer 27

When two constraint lines cross

Question 28

What is a shadow price

Answer 28

Max premium willing to pay for one extra unit
Increase in contribution that could be created by having one more unit of limiting factor

Question 29

What is risk averse

Answer 29

Aim for best outcome in worst case scenario
Maximise
Min payoff with max supply level

Question 30

What is risk neutral

Answer 30

Ignores range of outcomes and aim for highest EV
Expected value

Question 31

What is risk seeker

Answer 31

Best outcome in best case scenario
Maximax
Max payoff with max supply level

Question 32

What is standard deviation

Answer 32

Compares actual outcomes with EV, theb how far on average outcome deviates from mean

Question 33

What does the squares represent on decision tree

Answer 33

Decision point

Question 34

What does circles represent on decision tree

Answer 34

Chance point