Study year 2021 – 2022
Management Accounting - Workshop Notes
WORKSHOP 1
ACCOUNTING is the process of measuring, interpreting and communicating financial information to
support decision making.
MNAGEMENT ACCOUNTING
- Internal reporting to managers
- Make informed business decisions
- Primary forward-looking
FINANCIAL ACCOUNTING
- External reporting to stakeholders
- Primary backward-looking
FIXED AND VARIABLE COSTS
VARIABLE AND FIXED COSTS BEHAVIOUR
COST IN TOTAL PER UNIT
Proportional variable costs Increase Remain the same
Fixed costs Remain the same decrease
COST PRICE PER UNIT = it changes with production all the time so it is not practical to use
NORMAL PRODUCTION = is the average production over a certain period of time
STANDARD FULL COST PER UNIT = is calculated using N so it is not actually related to the actual production
, Study year 2021 – 2022
Management Accounting - Workshop Notes
total variable
STANDARD FULL COST PER UNIT =total ¿ costs ¿ +
N act u al production
BREAK-EVEN ANALYSIS = the break-even point is the point at which total costs and total revenue are equal (the
amount of products you have to sell to mitigate costs)
BREAK−EVEN ANALYSIS=total ¿ costs ¿
contribution margin per unit
CONTRIBUTION MARGIN = the portion of sales revenue that is not consumed by variable costs and so contributes to
the average of fixed costs
CONTRIBUTION MARGIN PER UNIT =unit price−variable costs per unit
Management Accounting - Workshop Notes
WORKSHOP 1
ACCOUNTING is the process of measuring, interpreting and communicating financial information to
support decision making.
MNAGEMENT ACCOUNTING
- Internal reporting to managers
- Make informed business decisions
- Primary forward-looking
FINANCIAL ACCOUNTING
- External reporting to stakeholders
- Primary backward-looking
FIXED AND VARIABLE COSTS
VARIABLE AND FIXED COSTS BEHAVIOUR
COST IN TOTAL PER UNIT
Proportional variable costs Increase Remain the same
Fixed costs Remain the same decrease
COST PRICE PER UNIT = it changes with production all the time so it is not practical to use
NORMAL PRODUCTION = is the average production over a certain period of time
STANDARD FULL COST PER UNIT = is calculated using N so it is not actually related to the actual production
, Study year 2021 – 2022
Management Accounting - Workshop Notes
total variable
STANDARD FULL COST PER UNIT =total ¿ costs ¿ +
N act u al production
BREAK-EVEN ANALYSIS = the break-even point is the point at which total costs and total revenue are equal (the
amount of products you have to sell to mitigate costs)
BREAK−EVEN ANALYSIS=total ¿ costs ¿
contribution margin per unit
CONTRIBUTION MARGIN = the portion of sales revenue that is not consumed by variable costs and so contributes to
the average of fixed costs
CONTRIBUTION MARGIN PER UNIT =unit price−variable costs per unit
