Costs

What the syllabus asks of you

• Cost information: the need for accurate cost information
• Cost information: different types of costs: fixed, variable, direct and indirect
• Approaches to costing: full, contribution: the differences between full and contribution costing
• Approaches to costing: full, contribution: the uses and limitations of the full costing method
• Approaches to costing: full, contribution: the nature of the technique of contribution costing
• Approaches to costing: full, contribution: the difference between contribution and profit
• Approaches to costing: full, contribution: the limitations of contribution costing
• Approaches to costing: full, contribution: situations in which contribution costing would be and would not be used
• Uses of cost information: cost information for decision-making purposes, e.g. average, marginal, total costs
• Uses of cost information: how costs can be used for pricing decisions
• Uses of cost information: how costs can be used to monitor and improve business performance, including using cost information to calculate profits
• Uses of cost information: contribution costing as a means to help make special order decisions
• Break-even analysis: the meaning and importance of break-even analysis
• Break-even analysis: calculation and interpretation of break-even level of output, contribution, margin of safety and level of profit (in numeric and graphic form)
• Break-even analysis: the uses and limitations of break-even analysis