Cost Management: CMA Exam Part 1 - Section D

Author: Tom Coghlan

Includes the following topics: Cost behavior, process costing, activity-based costing, joint product costing, supply chain management, theory of constraints, value-chain analysis, benchmarking and cost of quality analysis.

Using CPE credits to prepare for the Certified Management Accountant (CMA) exam is a pathway to a more successful business career: one that opens doors, builds confidence, closes skills gaps, and lets you tap into a network of 85,000 professionals around the globe.

The CMA certification complements other credentials or degrees and tests for analytical and critical-thinking skills not covered in other exams. About one in three active CMAs in the U.S. are also CPAs.

Publication Date: April 2017

Designed For
Financial officers and controllers, Financial accountants, managerial and cost accountants, Financial and business analysts, Budget managers and analysts, Risk managers, CIO's and information technology professionals.

Topics Covered

• Measurement Concepts
• The Relevant Range
• Mixed Costs
• Absorption and Variable Costing
• Joint Cost Allocation
• Job-Order Costing
• Process Costing
• Activity-Based Costing (ABC)
• Life-Cycle Costing
• Service Department Allocations
• Supply Chain Management
• Theory of Constraints
• Capacity Planning and Costing
• Value Chain Analysis
• Process Analysis
• Best Practice Analysis
• Cost of Quality

Learning Objectives

• Demonstrate an understanding of measuring of costs and movement of costs between raw materials, work in process and finished goods inventories.
• Demonstrate an understanding of how fixed and variable costs behave in the long and short term.
• Estimate fixed and variable portions of mixed costs using the high-low method.
• Calculate inventory, cost of goods sold, and operating income using both absorption and variable costing.
• Demonstrate an understanding of split-off point, separable costs, and by-product costing.
• Determine the allocation of joint product costs using the physical measure, sales value at split-off, net realizable value, and constant gross margin methods.
• Calculate inventory and cost of goods sold under job-order costing.
• Define the nature of process costing, and demonstrate a knowledge of process costing flows. Calculate inventory values and cost of goods sold using FIFO and weighted average process costing.
• Explain the differences between traditional overhead allocation and Activity Based Costing (ABC). Define elements of ABC such as cost pool, cost driver, activity driver, resource driver, and non-value added activity.
• Develop an understanding of the concept of life-cycle costing.
• Calculate service and support department cost allocation using the direct method, step-down method, and reciprocal method.
• Define materials requirements planning (MRP). Define and describe the operational benefits of implementing Enterprise Resource Planning (ERP) and Just in Time (JIT) systems.
• Demonstrate a general understanding of the theory of constraints. Identify the five steps involved in a theory of constraints analysis.
• Describe how the capacity level affects product costing, capacity management, pricing and financial statements.
• Define value chain and identify the steps in value chain analysis. Explain how value chain analysis is used to better understand a firm's competitive advantage.
• Demonstrate an understanding of process value analysis and business process reengineering.
• Demonstrate an understanding of best practice analysis (benchmarking) and how it can be used by an organization to improve process performance.
• Describe and identify the components of the costs of quality, including conformance and non-conformance costs.

Level
Overview

Instructional Method
Self-Study

NASBA Field of Study
Finance (6 hours)

Program Prerequisites
None

Advance Preparation
None