This is the best summary to help you pass MAC2601 with ease. Pass this subject the first time around with an average of 80%

MAC2601
The best summary to help you pass mac2601 with ease




LORET JENKINSON

,Welcome


Table of Contents
Welcome...................................................................................................................................................... 1

Study Unit 1: Cost objects, classifcation and behaviour.........................................................................3

Study Unit 2: Estimation techniques and the linear equation..............................................................11

Study Unit 3: Cost-volume-proft analysis.............................................................................................. 15

Study Unit 4: Material............................................................................................................................... 20

Study Unit 5: Labour................................................................................................................................. 23

Study Unit 6: Overheads........................................................................................................................... 31

Study Unit 7: First-in-frst-out (FIFO) method......................................................................................... 36

Study Unit 8: Weighted average method................................................................................................ 38

Study Unit 9: The direct costing method versus the absorption costing method..............................39

Study Unit 10: Reconciling diferences betteen net profts.................................................................42

Study Unit 11: Comparing ABC and the traditional costing method...................................................45

Study Unit 12: ABC system design and application...............................................................................48

Study Unit 13: The job costing system.................................................................................................... 49

Study Unit 14: The process costing system – all units completed.......................................................53

Study Unit 15: Work-in-process, equivalent units and the quantity statement..................................57

Study Unit 16: Losses................................................................................................................................ 62

Study Unit 17: Production cost statements............................................................................................ 65

Study Unit 18: Allocation statements...................................................................................................... 67

Study Unit 19: Costing joint products..................................................................................................... 70

Study Unit 20: Accounting for by-products............................................................................................ 73

Study Unit 21: The budgeting process.................................................................................................... 75

Study Unit 22: Flexing the budget........................................................................................................... 82




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,Study Unit 23: The standard costing system.......................................................................................... 83

Study Unit 24: Calculating selected variances........................................................................................ 85

Study Unit 25: Reconciliation and analysis of variances.......................................................................92

Study Unit 26: Relevant versus irrelevant costs.....................................................................................94

Study Unit 27: Short-term decision-making (special orders)................................................................96

Study Unit 28: Limiting factors and the allocation of resources..........................................................99

Study Unit 29: Cost-volume-proft analysis (CVP)................................................................................102

Study Unit 30: Probabilities.................................................................................................................... 104

Study Unit 31: Decision trees................................................................................................................. 106




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, Study Unit 1: Cost objects, classifcation and behaviour


1. Introducton




 Accountants need to know the cost of certain objects (including products)
for the following reasons:
a. to value inventory for reportng purposes
b. to plan and control actvites in the organisaton
c. to make decisions that will improve the organisatonns proftability


2. Cost objects and traceability


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