Cma Exam1 Study Program Section B Planning Budgeting
Master the learning objectives that will be tested by the CMA for Part 1 Section B
Last updated 2022-01-10 | 4
- Have a winning strategy to answer the IMA multiple choice questions.- Get a passing mark on the multiple chose questions in part 1 of the CMA exam
- Develop an effective approach to answering the essay question part of the exam
What you'll learn
* Requirements
* Knowledge of excel. A management accounting textbook.Description
This course covers the IMA material in much more depth. There will be other companion couses covering every section of the Part 1 exam.The same learning outcomes are covered for the section on Budgeting and Planning but the information is presented in a different fashion.
This course will further your preparation for the exam. Planning. Budgeting and Forecasting section of Part 1 Exam multiple-choice questions will be 30% of the one hundred multiple choice questions on the exam.
Budgeting and financial forecasting are tools that companies use to establish a plan for where management wants to take the company—budgeting—and whether it is heading in the right direction—financial forecasting.
Although budgeting and financial forecasting are often used together, distinct differences exist between the two concepts. Budgeting quantifies the expectation of revenues that a business wants to achieve for a future period, whereas financial forecasting estimates the amount of revenue or income that will be achieved in a future period.
KEY TAKEAWAYS
Budgeting is the financial direction of where management wants to take the company, helping quantify the expectation of revenues that a business wants to achieve for a future period,
Financial forecasting tells whether the company is headed in the right direction, estimating the amount of revenue and income that will be achieved in the future.
Budgeting creates a baseline to compare actual results to determine how the results vary from the expected performance.
Financial forecasting is used to determine how companies should allocate their budgets for a future period, but unlike budgeting, financial forecasting does not analyze the variance between financial forecasts and actual performance.
A budget is an outline of expectations for what a company wants to achieve for a particular period, usually one year. Characteristics of budgeting include:
Estimates of revenues and expenses.
Expected cash flows.
Expected debt reduction.
A budget is compared to actual results to calculate the variances between the two figures.
Budgeting represents a company's financial position, cash flow, and goals. A company's budget is usually re-evaluated periodically, usually once per fiscal year, depending on how management wants to update the information. Budgeting creates a baseline to compare actual results to determine how the results vary from the expected performance.
While most budgets are created for an entire year, that is not a hard-and-fast rule. For some companies, management may need to be flexible and allow the budget to be adjusted throughout the year as business conditions change.
Financial Forecasting
Financial forecasting estimates a company's future financial outcomes by examining historical data. Financial forecasting allows management teams to anticipate results based on previous financial data. Characteristics of financial forecasting include:
Used to determine how companies should allocate their budgets for a future period. Unlike budgeting, financial forecasting does not analyze the variance between financial forecasts and actual performance.
Regularly updated, perhaps monthly or quarterly, when there is a change in operations, inventory, and business plan.
Can be created for both short-term and long-term. For example, a company might have quarterly forecasts for revenue. If a customer is lost to the competition, revenue forecasts might need to be updated.
A management team can use financial forecasting and take immediate action based on the forecasted data.
Who this course is for:
- You must have a university degree.
Course content
10 sections • 27 lectures
Introduction to the the CMA Preview 02:25
Know that Professional Accounting Exams are graded differently than university Preview 05:15
Professional exams are different than university exams and knowing how they are different provides you an advantage.
Overview of this section Preview 01:30
What is Strategic Planning? Preview 02:31
Two basic strategies ;
1. Product differentiation
a. Offering products and services perceived by customers as being superior and
unique
b. Resulting in increase of brand loyalty and prices customers willing to pay
2. Cost leadership
a. Achieving low costs relative to competitors
b. Resulting in increase of market share and growth of company
Know these Strategic Planning Learning outcomes Preview 02:39
CMA Published Learning Outcomes Preview 01:03
Past Candidates answers to learning outcome questions - Strategic Planning Preview 00:45
Know the answers to Past CMA Questions on Strategic Planning
The IMA will test strategic planning with conceptual multiple choice questions. Remember to try and eliminate two choices if you do not know the answer immediately. Then you have a 50-50 chance.
Also - make sure you understand Porter's five forces, cost and differential strategies.
Know These Learning Outcomes - Budget Concepts Preview 01:47
CMA Published Learning Outcomes Preview 01:18
Past Candidates answers to learning outcome questions - Budget Concepts Preview 05:42
Know the answers to Past CMA Questions Budget Concepts
These learniing outcomes will be tested with conceptual multiple choice questions. Again Try and eliminate 2 choices.
CMA Published Learning Outcomes Preview 00:27
Forecasting Learning Outcomes as questions Preview 00:23
Forecasting Techniques Conceptual CMA questions
The CMA exam will have both conceptual and computational MC questions on the exam. The past conceptual questions I put in the quiz, the computational will be in the assignment.
10 Forecasting Techniques Past Computational CMA questions
These questions require you to make calculations. The IMA will "weight" correct answers to computational questions higher than conceptual questions. Why? Because to answer a computational question correctly indicates that you do understand the concept. Try and allow 3 min. per question
6 Forecasting techniques Past computational CMA MCQ's
Know your cumulative learning curves and expected value calculations.
23 Practice Questions on Forecasting Techniques Preview 00:01
Download these 23 questions and practice developing answers.