CAT T7

Now let me introduce what is all about in this paper.CAT T7-planning,control and performance management aims to develop knowledge and understanding of the application of management accounting techniques to support the management processes of planning,decision-making,control and performance measurement.Again this paper requires students to apply the knowledge into different situations.Knowledge will be brought forward from CAT T2(variances calculation part) and all of CAT T4.This paper actually contains broad area of syllabus but short-term decision-making and CVP analysis were removed and included in CAT T10 from june 2009 which has reduce the load of this paper.

So why is it useful to learn from this paper?Do you all know that what kind of accountant in an organisation make most profit?It is actually management accountant and treasury accountant.In this paper,you will learn the skill that is needed to become a management accountant in the future.After you completed this paper and have some relevant working experience,you are able to become a management accounting technician in an organisation.

The key areas of the syllabus are forecasting,budget preparation,flexible budgets,variance computation and interpretation,performance indicators,cost reduction and value enhancement.It was important that students remember the knowledge that is learnt from CAT T4 such as absorption costing,marginal costing and more.In CAT T7,you will learn even more costing techniques which are useful to determine the pricing of the product,analysing variances and investigation of variances,prepare a budget and more.Not only costing techniques,you also have the opportunity to learn performance measurement and use performance indicators to measure quality of service,unit costs,profitability,economy,effectiveness,efficiency and more.

Beside of using absorption to charge product,we will learn one more method,activity-based costing(ABC) which is the upgrade version of absorption costing,it eliminates the 3 steps of getting the Overhead Absorption Rate and able to charge a more realistic price especially for big companies which have a lot of overheads rather than direct costs.We also learn to apply standard costing,which will compare the actual with budget and calculate the variances and interpret it.All of these are useful in organisation,especially the most common used standard costing.

Therefore,don't be demoralised by this paper,keep your mind open to accept any new costing techniques and performance measurement method so that finally you are ready for managing the performance of an organisation.Guidance may be given when I found the difficult areas of CAT T7,have fun :)