Management Accounting Fundamentals [MA1] Examination Blueprint
2014–2015
Purpose
The Management Accounting Fundamentals [MA1] examination has been constructed using an examination blueprint. The blueprint, also referred to as
the test specifications, outlines the content areas covered on the examination and the weighting allotted to each content area. This document also lists the
topics, the level of competence for each topic, and the related learning objectives. In addition, information is provided on the proportion of each question
type presented in the examination (that is, multiple choice, quantitative problems, and so on).
Use
Students should use the examination blueprint to prepare for the course examination. The blueprint may not include all the topics listed in the course
materials. However, students are still responsible for acquiring a broad-based knowledge of all topics not listed in the blueprint since these topics will be
tested in assignment and review questions. The topics not listed in the blueprint will also provide students with a greater depth of understanding of the
concepts.
Examination objectives
The objectives of this three-hour, comprehensive examination are to test CGA students on the prerequisite knowledge required for advancement into
many courses, and to ensure that students have the broad-based knowledge in management accounting concepts needed to function properly in upperlevel education and certification courses.
Examination guidelines for questions
i)
Question type
The following are guidelines on the type of questions and their approximate weightings:
Question item
Multiple-choice questions
Short-answer questions
Quantitative problems
Qualitative/worksheet-related questions
Percent weighting
20% to 30%
10% to 20%
50% to 60%
10% to 20%
Several questions will also be decision oriented, where the student is asked to take the role of creditor, investor, manager or auditor and make a
recommendation or a decision based on analysis performed.
ii) Question content
The following table is organized according to content area and provides information on topics, learning objectives, weighting, and levels of
competence.
Examination sessions: March 2015; June 2015
Page 1 of 11
Management Accounting Fundamentals [MA1] examination blueprint
Content area
Topics
Learning objectives
Module 1. Basic concepts of management accounting
Weighting
(%)
2% to 5%
Levels of
competence
1.1
The manager’s need for information

Describe the role of management accountants in an
organization.
Level 2
1.2
Comparing financial and managerial
accounting

Describe the major differences and similarities
between financial and managerial accounting.
Level 2
1.3
Organizational structure

Summarize the purpose of decentralization and line
and staff relationships in accomplishing the
organization’s objectives..
Level 2
1.4
Ethical standards

Summarize the importance of upholding ethical
standards.
Level 2
1.5
Process management

Describe the basic concepts underlying lean
production: Six Sigma, enterprise systems, and
enterprise risk management.
Level 2
1.6
General cost classifications

Identify the three basic cost elements involved in the
manufacture of a product, and give an example of
each.
Level 1
1.7
Cost classifications on financial statements

Prepare and explain the cost classifications on a
manufacturing income statement and a schedule of
cost of goods manufactured.
Level 1
1.8
Costs for planning, costing, and decision
making

Compare and contrast types of costs: product and
period, variable and fixed, direct and indirect,
differential, opportunity, and sunk; and give an
example of each.
Level 1
Examination sessions: March 2015; June 2015
Page 2 of 11
Content area
Topics
Learning objectives
Module 2. Job-order costing
Weighting
(%)
3% to 8%
Levels of
competence
2.1
Job-order costing — Overview

Calculate predetermined overhead rates, and explain
why estimated overhead costs (rather than actual
overhead costs) are used in the costing process.
Level 1
2.2
Job-order costing — Flow of costs

Prepare journal entries to record the flow of direct
materials cost, direct labour cost, and manufacturing
overhead cost in a job-order costing system.
Level 1
2.3
Application of manufacturing overhead using
predetermined overhead rates

Apply overhead cost to Work in Process using the
predetermined overhead rate.
Level 1
2.4
Complications of overhead application

Calculate any balance of under- or overapplied
overhead cost for a period, and prepare the journal
entry needed to close the balance into the appropriate
accounts.
Level 1
2.5
Job-order costing in service companies

Explain the role of job-order costing in service
companies.
Level 1
2.6
Scrap and rework

Prepare journal entries to deal with scrap and rework
of unacceptable production.
Level 1
2.7
Computer illustration 2.7-1: Cost schedules

Prepare worksheet templates to calculate schedules of
Cost of Goods Manufactured and Cost of Goods
Sold.
Level 1
Examination sessions: March 2015; June 2015
Page 3 of 11
Content area
Topics
Learning objectives
Module 3. Process costing
Weighting
(%)
3% to 8%
Levels of
competence
3.1
Comparison of job-order and process costing

Summarize the major similarities and differences
between job-order and process costing.
Level 2
3.2
A perspective of process cost flows

Prepare journal entries to record the flow of
materials, labour, and overhead through a process
costing system.
Level 1
3.3
Equivalent units of production

Explain and calculate the equivalent units of
production for both the weighted-average method and
the FIFO method.
Level 1
3.4
Production report — Weighted-average
method

Prepare a production report using the
weighted-average method.
Level 1
3.5
Production report — FIFO method

Prepare a production report using the FIFO method,
and compare production reports prepared under the
weighted-average method and FIFO.
Level 1
3.6
Spoilage

Calculate the cost of spoilage.
Level 1
3.7
Operation costing and flexible manufacturing

Describe the conditions under which operation
costing is useful to management, and summarize the
impact of a flexible manufacturing system on joborder and process costing.
Level 2
3.8
Computer illustration 3.8-1: Production report
— Weighted-average method and FIFO
method

Prepare a worksheet that calculates and prepares a
production report and cost reconciliation for both
weighted-average and FIFO methods, and compare
the two methods.
Level 1
Examination sessions: March 2015; June 2015
Page 4 of 11
Content area
Topics
Learning objectives
Module 4. Cost behaviour and cost-volume-profit analysis
Weighting
(%)
15% to 20%
Levels of
competence
4.1
Variable cost behaviour patterns

Identify examples of variable costs, and explain the
effect of a change in activity on both total variable
costs and per-unit variable costs.
Level 1
4.2
Fixed costs

Identify examples of fixed costs, and explain the
effect of a change in activity on both total fixed costs
and fixed costs expressed on a per-unit basis.
Level 1
4.3
Analysis of mixed costs

Determine the fixed and variable portion of a mixed
cost using the high-low method and the regression
method.
Level 1
4.4
Contribution margin and contribution format
income statement

Prepare an income statement using the contribution
method.
Level 1
4.5
Computer illustration 4.5-1: Regression
analysis

Prepare a worksheet to analyze mixed costs.
Level 2
4.6
Basics of cost-volume-profit analysis

Explain how changes in activity and changes in
variable costs, fixed costs, selling price, and volume
affect contribution margin and net income.
Level 1
4.7
Break-even analysis

Calculate the break-even point by both the equation
method and the contribution margin method.
Level 1
4.8
CVP considerations in choosing a cost
structure

Use cost-volume-profit formulas to determine the
activity level needed to achieve a desired target net
profit figure.
Level 1
4.9
Sales mix

Calculate the break-even point for a multiple product
company, and explain the effects of shifts in the sales
mix on contribution margin and the break-even point.
Level 1
4.10 Assumptions of CVP analysis

Summarize the assumptions made regarding costvolume-profit analysis.
Level 2
4.11 Computer illustration 4.11-1: CVP sensitivity
analysis

Prepare a worksheet to perform a sensitivity analysis
on CVP.
Level 2
Examination sessions: March 2015; June 2015
Page 5 of 11
Content area
Topics
Learning objectives
Module 5. Activity-based costing and service department costing
Weighting
(%)
8% to 12%
Levels of
competence
5.1
Overhead costing methods

Explain how activity-based costing differs from
traditional costing methods.
Level 1
5.2
Design of an activity-based costing system

Determine overhead costs and calculate product and
customer margins using activity-based costing.
Level 1
5.3
Comparison of traditional and ABC costs

Describe the benefits and limitations of activity-based
costing.
Level 2
5.4
Computer illustration 5.4-1: Activity-based
costing

Prepare a worksheet to compare the effects of
allocating manufacturing overhead based on direct
labour-hours and activities performed.
Level 1
5.5
Guidelines for service department cost
allocation

Prepare costing schedules to allocate fixed and
variable service department costs to other
departments using the direct method, the step
method, and the reciprocal method.
Level 1
5.6
Computer illustration 5.6-1: Step method and
direct method of cost allocation

Calculate and compare the allocation of costs using
the step method and the direct method, and explain
the differences between the two methods.
Level 1
Examination sessions: March 2015; June 2015
Page 6 of 11
Module 6. Absorption and variable costing and budgeting
14% to 18%
6.1
Absorption and variable costing

Explain how absorption costing differs from variable
costing, and compute the unit product cost under each
method.
Level 1
6.2
Absorption and variable costing income
statements

Prepare income statements using both absorption and
variable costing, and reconcile the two net income
figures by observing the effect of deferred fixed
manufacturing overhead costs.
Level 1
6.3
Advantages and disadvantages of absorption
and variable costing

Explain the advantages and limitations of both the
absorption and variable costing methods.
Level 1
6.4
Impact of lean production

Explain how the use of lean production methods
decreases or eliminates the difference in net income
reported under the absorption and variable costing
methods.
Level 1
6.5
Basic framework of budgeting

Summarize the purpose and advantages of budgeting,
as well as its role in planning and control.
Level 2
6.6
Preparing the master budget

Prepare the following budgets: sales budget,
production budget, direct materials budget,
manufacturing overhead budget, selling and
administrative expense budget, cash budget, budgeted
income statement and balance sheet.
Level 1
6.7
Computer illustration 6.7-1: Sales budget and
cash collection schedule

Prepare a worksheet to conduct a what-if analysis of
changes to selling price and sales volume on a sales
budget and a schedule of cash collections.
Level 1

Flexible budgets
Prepare a flexible budget, and explain the advantages
of the flexible budget approach over the static budget
approach.
Level 1
6.8
6.9
Computer illustration 6.9-1: Determining
flexible budget and sales volume variances

Prepare a worksheet to calculate the flexible budget
and sales volume variances.
Level 1
Examination sessions: March 2015; June 2015
Page 7 of 11
Module 7. Standard costs for materials, labour, and variable overhead
9% to 12%
7.1
Standard costs — Management by exception

Define the term management by exception and
describe how it relates to standard costs.
Level 2
7.2
Setting standard costs

Explain how direct materials standards, direct labour,
and variable overhead standards are set.
Level 1
7.3
A general model for variance analysis

Calculate and interpret the following variances and
explain their significance: direct materials price and
quantity variance, direct labour-rate and efficiency
variances.
Level 1
7.4
Variable overhead variances

Prepare a variable overhead performance report using
the flexible budget to show both spending and
efficiency variances.
Level 1
7.5
Variance analysis and management by
exception

Explain how managers would determine whether a
variance constitutes an exception that requires their
attention.
Level 1
7.6
Advantages and disadvantages of standard
costs

Explain the advantages and disadvantages of using
standard costs.
Level 1
Examination sessions: March 2015; June 2015
Page 8 of 11
Module 8. Fixed overhead analysis and reporting for control
12% to 16%
8.1
Overhead rates and standard costing

Explain the significance of the denominator activity
figure in determining the standard cost of a unit of
product.
Level 1
8.2
Fixed overhead budget and volume variances

Calculate and interpret the fixed overhead budget and
volume variances.
Level 1
8.3
Journal entries to record standard costs and
variances

Prepare journal entries to record standard costs and
variance.
Level 2
8.4
Computer illustration 8.4-1: Fixed costs in a
flexible budget

Prepare a flexible budget to analyze fixed costs and
perform a what-if analysis.
Level 1
8.5
Full income statement variance analysis

Prepare an income statement incorporating variance
analysis.
Level 1
8.6
Decentralization and segment reporting

Prepare a segmented income statement using the
contribution format, and explain the difference
between traceable fixed costs and common fixed
costs.
Level 1
8.7
Responsibility centres

Summarize the differences between cost centres,
profit centres, and investment centres, and explain
how performance is measured in each.
Level 2
8.8
Return on investment and residual income

Calculate and interpret the return on investment and
residual income and list the strengths and weaknesses
of each method.
Level 1
8.9
Balanced Scorecard

Explain the use of Balanced Scorecards to assess
performance.
Level 1

Compute the delivery cycle time, throughput time,
manufacturing cycle efficiency, and time spent on
non-value-added activities.
Level 1
8.10 Other performance measures
Examination sessions: March 2015; June 2015
Page 9 of 11
Module 9. Relevant costs for decision making
12% to 16%
9.1
Cost concepts for decision making

Identify sunk costs, and explain why they are not
relevant in decision making based on a general rule
for distinguishing between relevant and irrelevant
costs.
Level 1
9.2
Adding and dropping product lines or other
segments

Prepare an analysis showing whether a product line or
other organizational segment should be dropped or
retained.
Level 1
9.3
The make-or-buy decision

Explain make-or-buy decisions and prepare a makeor-buy analysis.
Level 1
9.4
Computer illustration 9.4-1: Relevant costs

Prepare a worksheet to analyze the relevant costs of a
decision to retain or close a store.
Level 1
9.5
Special orders

Prepare an analysis showing whether a special order
should be accepted.
Level 1
9.6
Joint product costs and the contribution
approach

Prepare an analysis showing whether joint products
should be sold at the split-off point or processed
further.
Level 1
9.7
Utilization of a constrained resource

Determine the most profitable utilization of scarce
resources.
Level 2
Examination sessions: March 2015; June 2015
Page 10 of 11
Module 10. Pricing and quality in management accounting
2% to 5%
10.1 Cost-plus pricing

Calculate the target selling price of a product using
cost-plus pricing under the absorption costing and
variable costing approaches.
Level 1
10.2 Computer illustration 10.2-1: Pricing

Prepare a spreadsheet to derive the markup
percentage needed to achieve a target return on
investment (ROI) and prepare a price quotation under
both absorption costing and variable costing
approaches.
Level 2
10.3 Time and materials pricing

Calculate and use billing rates and the material
loading charge used in time and material pricing in
service organizations.
Level 1
10.4 Target costing

Explain the rationale of target costing.
Level 1
10.5 Costs of quality

List the four types of quality costs and describe a
quality cost report.
Level 2
10.6 Ethical considerations

Summarize four standards of ethical conduct to be
followed by the management accountant.
Level 2
Examination sessions: March 2015; June 2015
Page 11 of 11