Cost and management accounting tutoring in English

Cost classification: the decision everything else depends on

Direct against indirect, fixed against variable, product cost against period cost. These sound like definitions to learn, but every later calculation hangs off them. If you classify factory rent as a period cost you will get a different profit figure from the model answer and you will not know why. We go through classification on real cases until you can look at a cost line and place it without hesitating, including the awkward ones like supervisor salaries, depreciation of factory equipment and delivery costs.

Full costing against direct costing, and why the profit differs

The single most examined comparison in the subject. Under full costing, fixed manufacturing costs attach to the units and sit in inventory until those units are sold. Under direct costing they hit the period in full. When production is higher than sales, full costing reports a larger profit, because some fixed cost stays capitalised in closing inventory. When the fixed cost per unit is stable between periods, the gap between the two profit figures is exactly that fixed cost per unit multiplied by the change in inventory. We prove it numerically so you can reconcile the two answers in the exam.

Allocating overheads: cost centres and activity-based costing

Indirect costs do not attach themselves to products, so somebody has to decide how they are spread. We work through the traditional route, collecting overheads into cost centres and allocating them with a driver such as labour hours or machine hours, and then through activity-based costing, where you identify activities, work out a cost driver rate for each and charge products by consumption. The exam usually wants both and a comment on why the two give different unit costs, which is the part most people leave blank.

Break-even, contribution and short-term decisions

Contribution margin per unit, break-even point in units and in revenue, margin of safety, and the effect of a change in price or in fixed costs. From there we move to the decision questions that come up every year: make or buy, accepting a special order below normal price, dropping a product line, and choosing between products when a resource is scarce. The trick in all of them is the same, work with relevant costs and ignore what will not change, and we practise spotting which is which.

Standard costs and variance analysis

Setting a standard, comparing it against what actually happened and splitting the difference into its causes. Material price and usage variances, labour rate and efficiency variances, and overhead variances. We work on the sign convention, favourable and adverse, because getting the direction wrong turns a correct calculation into a wrong answer, and on writing the short interpretation the exam asks for underneath.

How the lessons work

One to one, by video call, with a shared whiteboard where we build the cost tables together rather than me showing you a finished one. No fixed schedule and no packages: you say which day and time work and we book it, including the week before the exam. Bring your lecturer's problem sets and past papers. Everything we solve stays with you afterwards, in English or in Spanish, whichever you prefer.