Decision Analysis: CMA Exam 2 - Section C

Author: Tom Coghlan

This course provides an overview of marginal analysis, pricing, and cost/volume/profit analysis.

Whether you take the CMA exam or not, using your CPE credits to review the material tested on the Certified Management Accountant exam will help you to close the skills gap and move from compiling and reporting the results to a seat at the management table.

For more than 40 years, the CMA (Certified Management Accountant) certification has been the global benchmark for management accountants and financial professionals. Why? Because CMAs can explain the "why" behind numbers, not just the "what." And that can give you greater credibility, higher earning potential, and ultimately a seat at the leadership table.

Using CPE credits to prepare for the Certified Management Accountant (CMA) exam is a pathway to a more successful business career: one that opens doors, builds confidence, closes skills gaps, and lets you tap into a network of 85,000 professionals around the globe.

The CMA certification complements other credentials or degrees and tests for analytical and critical-thinking skills not covered in other exams. About one in three active CMAs in the U.S. are also CPAs.

The Certified Managerial Accountant (CMA) designation delivers:
1) The ability to see the big picture, both operational and financial.
2) The know-how to leverage technology, especially as it relates to gathering and analyzing data.
3) Insight into financial implications of business decisions and the ability to communicate them in way that is clear and jargon-free.

Publication Date: April 2017

Designed For
Financial officers, controllers and chief financial officers; financial, managerial and cost accountants; financial and business analysts; budget managers and analysts; risk managers; chief information officers and information technology professionals.

Topics Covered

• Cost/volume/profit analysis
• Marginal analysis
• Pricing

Learning Objectives

• Demonstrate an understanding of how cost/volume/profit (CVP) analysis is used to analyze the changes of total revenues, total costs, and operating income based on changes in output, sales prices, unit variable costs, and fixed costs.
• Calculate contribution margin (per unit and in total).
• Calculate break-even (units and revenue).
• Calculate margin of safety and margin of safety %.
• Differentiate between fixed and variable costs with respect to levels of output.
• Demonstrate an understanding of the relationship of total revenues and total costs in relation to output within a relevant range.
• Identify and calculate total cost, average fixed cost, average variable cost, and average total cost.
• Calculate the break-even point in units and dollars to achieve target operating income and target net income.
• Use cost/volume/profit analysis to analyze the impact of changes in sales mix for multiple products.
• Use cost/volume/profit analysis to analyze of special orders.
• Demonstrate an understanding of how the prices for goods and services are affected by the demand for and the supply of the product or service.
• Demonstrate an understanding of the factors that determine prices in pure competition, monopolistic competition, monopoly, and oligopoly.
• Demonstrate an understanding of the impact of cartels on pricing.
• Identify and differentiate between different pricing methods, including market comparables, cost-based, and market-based approaches.
• Identify techniques to set prices based on customer perceptions of value, competitor technologies, products and costs.
• Demonstrate an understanding of the concepts and steps to develop target prices and target costs.
• Calculate target operating income per unit and target cost per unit.
• Define and distinguish between a value added and a non-value-added cost.
• Define value engineering.

Level
Overview

Instructional Method
Self-Study

NASBA Field of Study
Finance (5 hours)

Program Prerequisites
None

Advance Preparation
None