4.Marginal and absorption costing

a）Explain the importance of,and apply,the concept of contribution.

b）Demonstrate and discuss the effect of absorption and marginal costing on inventory valuation and profit determination.

c）Calculate profit or loss under absorption and marginal costing.

d）Reconcile the profits or losses calculated under absorption and marginal costing.

e）Describe the advantages and disadvantages of absorption and marginal costing.

5.Job and batch costing

a）Describe the characteristics of job and batch costing.

b）Describe the situations where the use of job or batch costing would be appropriate.

c）Prepare cost records and accounts in job and batch costing situations.

d）Establish job costs from given information.

6.Process costing

a）Describe the characteristics of process costing.

b）Describe the situations where the use of process costing would be appropriate.

c）Explain the concepts of normal and abnormal losses and abnormal gains.

d）Calculate the cost per unit of process outputs.

e）Prepare process accounts involving normal and abnormal losses and abnormal gains.

f）Calculate and explain the concept of equivalent units.

g）Apportion process costs between work remaining in process and transfers out of a process using the weighted average and FIFO methods.

h）Prepare process accounts in situations where work remains incomplete.

i）Prepare process accounts where losses and gains are identified at different stages of the process.

j）Distinguish between by-products and joint products.

k）Value by-products and joint products at the point of separation.

l）Prepare process accounts in situations where by-products and/or joint products occur.

（Situations involving work-in-process and losses in the same process are excluded）.

7.Service/operation costing

a）Identify situations where the use of service/operation costing is appropriate.

b）Illustrate suitable unit cost measures that may be used in different service/operation situations.

c）Carry out service cost analysis in simple service industry situations.

E BUDGETING AND STANDARD COSTING

1.Nature and purpose of budgeting

a）Explain why organisations use budgeting.

b）Explain the administrative procedures used in the budgeting process.

c）Describe the stages in the budgeting process.