2.Functional budgets

a）Explain the term 'principal budget factor'.

b）Prepare budgets for sales,production,materials（usage and purchases）,labour and overheads.

3.Flexible budgets and standard costing

a）Explain and prepare fixed,flexible and flexed budgets.

b）Explain the purpose and principles of standard costing.

c）Establish the standard cost per unit under absorption and marginal costing.

4.Basic variance analysis under absorption and marginal costing

a）Calculate the following variances:

i）Sales price and volume

ii）Materials total,price and usage

iii）Labour total,rate and efficiency

iv）Variable overhead total,expenditure and efficiency

v）Fixed overhead total,expenditure and,where appropriate,volume,capacity and efficiency.

b）Interpret all the variances in 4（a）.

c）Explain possible causes of all the variances in 4（a）.

d）Describe the interrelationships between the variances in 4（a）.

e）Calculate actual or standard figures where the variances in 4（a）are given.

5.Reconciliation of budgeted profit and actual profit

a）Reconcile budgeted profit with actual profit under standard absorption costing.

b）Reconcile budgeted profit or contribution with actual profit or contribution under standard marginal costing.

F SHORT-TERM DECISION-MAKING TECHNIQUES

1.Cost-volume-profit（CVP）analysis

a）Calculate and interpret a break-even point and a margin of safety.

b）Demonstrate an understanding of,and use,the concepts of a target profit or revenue and a contribution to sales ratio.

c）Identify the elements in traditional and contribution break-even charts and profit/volume charts.

d）Apply CVP analysis to single-product situations.

（Multi-product break-even charts and profit/volume charts are excluded）.

2.Relevant costing

a）Explain the concept of relevant costing.

b）Calculate the relevant costs for materials,labour and overheads.

c）Calculate the relevant costs associated with non-current assets.

d）Explain and apply the concept of opportunity cost.

3.Limiting factors

a）Identify a single limiting factor.

b）Determine the optimal production plan where an organisation is restricted by a single limiting factor.

c）Formulate a linear programming problem involving two variables.

d）Determine the optimal solution to a linear programming problem using a graphical approach.

e）Use simultaneous equations,where appropriate,in the solution of a linear programming problem.