[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-661537-105":59,"doc-detail-661537-en":130},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":123,"head_meta":125,"extra_data":127,"updated_unix":129},105,"en","management-accounting-p1-comprehensive-summary","Management Accounting - P1 - Comprehensive Summary","","Comprehensive coverage of CIMA P1 management accounting techniques, comparing traditional costing, absorption costing, and marginal costing with focus on how overhead absorption rates create over- or under-absorption and affect profit reporting. Includes activity based costing (ABC) with cost pools, cost drivers, step-by-step allocation, and a worked example calculating total unit cost. Extends to throughput accounting, joint product costing, by-product treatment, and digital costing contrasts. Concludes with variance analysis covering sales price/volume and material usage/price variances, their causes, and key formula relationships.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":20,"@type":76,"position":81},"https://docshare.wps.com/document/exam/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/management-accounting-p1-comprehensive-summary/661537/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/management-accounting-p1-comprehensive-summary/661537.png","ImageObject",300,407,{"name":92,"@type":93},"iuabcfuw","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-30","2026-10-28",true,{"@type":102,"interactionType":103,"userInteractionCount":8},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"How do over-absorption and under-absorption affect profit reporting under absorption costing?","Question",{"text":112,"@type":113},"Over-absorbed overhead means overhead absorbed exceeds overhead incurred, so the over-absorbed amount is added to profit in the statement of profit or loss. Under-absorbed overhead means overhead absorbed is less than overhead incurred, so the under-absorbed amount is subtracted from profit.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"What are cost pools and cost drivers in ABC costing?",{"text":117,"@type":113},"A cost pool is an activity that consumes resources with identified overhead costs, such as machine set-ups or quality checks. A cost driver is the unit activity factor that causes changes in the cost of an activity, such as number of setups, batches, or reviews.",{"name":119,"@type":110,"acceptedAnswer":120},"What is the difference between sales price variance and sales volume variance?",{"text":121,"@type":113},"Sales price variance measures the revenue difference due to standard versus actual selling price. Sales volume variance measures the revenue difference due to actual versus budgeted units sold, using a standard margin per unit.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},661537,1793169498,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":19,"category_name":20,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":8,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":19,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":129,"read_time":52},3985747874027,"https://ap-avatar.wpscdn.com/davatar_9964176cb1d06d4a9deccf72a44ae3dc","P1: Management Accounting  \nTraditional costing  \nAbsorption costing  \nOverhead absorption rate = Total overhead cost ÷ Budgeted activity level  \nOver-absorption Under-absorption  \n● Overhead absorbed is more than the overhead expenditure incurred  \n● Amount of over-absorbed overhead is added to profit in the statement of profit or loss  \n● Overhead absorbed is less than the overhead expenditure incurred  \n● Amount of under absorbed overhead is subtracted from profit in the statement of profit or loss  \nAdvantages  \n● Improved long-term pricing  \n● Ensure prices cover all costs  \n● Better cost control  \n● Consistent with financial reporting  \nDisadvantages  \n● More difficult  \n● Encourages over-production  \n● Requires arbitrary cost apportionments  \nMarginal costing  \nInventory is valued at variable production cost  \nWhich profit is higher?  \nInventory increases  \n● Absorption costing  \nAdvantages  \n● Better for short-term decision making  \n● Simpler  \nInventory decreases  \n● Marginal costing  \nDisadvantages  \n● Shouldn’t be used for long-term pricing  \n● Can’t be used for external reporting  \nActivity Based Costing  \nDefinitions  \nCost pool: An activity that consumes resources and for which overhead costs are identified and allocated e.g Machine set-ups, quality checks, reviews e.t.c. For each cost pool, there should be a cost driver  \nCost driver: A unit activity that consumes resources. ‘Any factor which causes a change in the cost of an activity.’ e.g number of setups, number of batches, number of reviews, number of sales orders e.t.c  \nSteps:  \n1. Identify activities that consume resources and incur overhead costs  \n2. Allocate overhead costs to activities that consume them  \n3. Determine the cost driver for each activity or cost pool  \n4. Collect data about the actual activity for the cost driver in each cost pool  \n5. Calculate the overhead cost of each product or service  \nExample  \n*Standard cost card ( Direct materials, Direct labour and production overhead) provided for P, R,S  \nThe company wishes to introduce ABC, and has identified two major cost pools for production overhead and their associated cost drivers.  \nInformation on these activity cost pools and their drivers is given below:  \nInspection costs $1 ,400 ,000-driven by purchase requisitions.  \nSetup costs $1 ,200 ,000-driven by number of batches.  \nP R S  \nNumber of purchase requisitions 1 ,200 1 ,800 2 ,000  \nNumber of set ups 240 260 300  \nCalculate the total cost per unit of product P.  \nAdvantages  \n● Better information  \n● Better cost control  \n● Better pricing  \n● Fairer overheads in units  \nDisadvantages  \n● Expensive  \n● Still some arbitrary allocations ● Need best cost driver  \nOther costing techniques  \nThroughput accounting  \nThroughput = selling price-raw material costs  \n➢ All costs other than materials are seen a fixed in the short term  \n➢ Inventory levels are ideally zero  \n➢ Idle time is accepted  \n➢ Value is added when a product is sold  \n● Optimal production: allocating scarce resources  \nCalculate throughput contribution per unit of bottleneck resource for each product, rank products in order of contribution and allocate resources using the ranking  \nJoint product costing  \n● Used when more than one product is produced in the same process at the same time  \n● Cost of each joint product is a share of the common processing costs up to the split-off point  \n● Methods of apportioning common process costs:  \n❏ Market value of each joint product at split-off point  \n❏ Net realisable value (final market value less costs incurred after split-off point)❏ Physical measurement (number of units of each product produced e.g litres, kilos)  \nAccounting for by-products  \n● Proceeds from sale of by-products may be treated as pure profit  \n● Proceeds from sale (less handling, selling costs) may be used to reduce cost of joint products  \nDigital costing  \nA digital product typically refers to a product that is stored, delivered and consumed in an electro","cbCaioPmWNMjTEb1","https://ap.wps.com/l/cbCaioPmWNMjTEb1","pdf",120786,"English","# Management Accounting\n## Traditional costing and absorption costing\n## Marginal costing\n## Activity Based Costing (ABC)\n## Other costing techniques\n## Variance analysis","[{\"question\":\"How do over-absorption and under-absorption affect profit reporting under absorption costing?\",\"answer\":\"Over-absorbed overhead means overhead absorbed exceeds overhead incurred, so the over-absorbed amount is added to profit in the statement of profit or loss. Under-absorbed overhead means overhead absorbed is less than overhead incurred, so the under-absorbed amount is subtracted from profit.\"},{\"question\":\"What are cost pools and cost drivers in ABC costing?\",\"answer\":\"A cost pool is an activity that consumes resources with identified overhead costs, such as machine set-ups or quality checks. A cost driver is the unit activity factor that causes changes in the cost of an activity, such as number of setups, batches, or reviews.\"},{\"question\":\"What is the difference between sales price variance and sales volume variance?\",\"answer\":\"Sales price variance measures the revenue difference due to standard versus actual selling price. Sales volume variance measures the revenue difference due to actual versus budgeted units sold, using a standard margin per unit.\"}]","Management Accounting - P1 - Comprehensive Summary | PDF"]