Cma Part 1
Cma Part 1
Cma Part 1
Section A: Planning, Budgeting and Forecasting: 1. Planning and Budgeting Concepts 2. Budget Methodologies 3. Other Types of Budgets 4. Ongoing Budget Reports 5. Forecasting Techniques 6. Learning Curves 7. Probability 8. Risk, Uncertainty, and Expected Value 9. Sensitivity Analysis 10. Top-Level Planning and Analysis
Section B: Performance Management 1. 2. 3. 4. 5. 6. 7. 8. Cost and Variance Measures Variance Analysis Concepts Manufacturing Input Variances Sales Variances Market Variances Variance Analysis for a Service Company Responsibility Centers and Reporting Segments Performance Measures
CMA Part 1
A. B. C. D. E. PLANNING, BUDGETING AND FORECASTING PERFORMANCE MANAGEMENT COST MANAGEMENT INTERNAL CONTROLS PROFESSIONAL ETHICS : : : : : 30% 25% 25% 15% 05%
Part 1 is a four-hour exam that will contain 100 multiple-choice questions and 8 to 10 written-response or calculation questions based on two scenarios.
Planning in Order to Achieve Superior Performance: To increase company profitability that leads to attain ultimate goal of the company, maximizing shareholder value. Role of Management in Attaining Profitable Growth: Two opposing philosophies between market theory and planning and control theory. The External Environment in Planning and Budgeting
Three interrelated environments affect managements planning and budgeting: 1) The industry in which the company operates, 2) The country or the national environment in which the company operates, and 3) The wider macro environment in which the company operates. E.g: Economic growth, level of interest rates, Changes in currency exchange rates, inflation and deflation, social factors.
Types of Plans and General Principles 1. Strategic Plans (Long-Term Plans): broad, general, long-term plans 2. Intermediate and Short-Term Plans 3. Other Types of Plans: Single Purpose Plan, Standing Purpose Plan, Contingency Planning The Relationship among Planning, Budgeting and Performance Evaluation 1. Management Develops plan in quantitative terms > Revise the plan through budget feed backs > carry out the plan > compare with actual > control tool > revision of existing plan. 2. Master Budget is summarized set of budgeted financial statements, including budgeted balance sheet, budgeted income statement and budgeted statement of cash flows. Meaning of Budgeting: A budget is realistic plan for the future that is expressed in quantitative terms. It is intended as a planning tool and is a guideline to follow in order to achieve the companys planned goals and objectives. A budget is a planning tool, a control tool, a communication tool and a motivational tool.
d. Strategic Decisions Strategic Decisions can also affect a products standard cost. e. Benchmarking The best performance anywhere can be chosen to attainable standards and can help a firm maintain its competitive edge.
Budget Methodologies:
The Budgeting Cycle: it is a process that goes on throughout the year, even though the budget is probably completed before the year begins. Development of the annual profit plan, although that is a big part of the cycle. Variance analysis is another important part. The Budgeting process includes: a. Using data from past performance as well as future expectations.
b. Actual results are reported on and compared with budgeted results on a monthly or quarterly basis. c. Management accountants assist managers in investigating the variances from the plan.
d. Managers and management accountants monitor market feedback, external conditions, and actual results as they plan for the next budget period. Budget/Profit Planning Manual The budget or profit-planning manual details the budgeting process. It is written and maintained by the department in charge of coordinating the development of the profit plan and it is their guidebook for the whole budget development process. It outlines what needs to be done and when. The manual contains: