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Elements and Performance Criteria

1. Gather and record operating and cost data
   • Identify and establish systems to generate operating and cost data
   • Systematically code, classify and check data for accuracy and reliability in accordance with organisational policy and procedures
2. Analyse data and assign costs
   • Analyse costs and identify cost behaviour characteristics
   • Assign costs to specified products, services and organisational units, and reconcile data to ensure calculations are accurate and comply with organisational procedures
   • Ensure interpretation of revenues and costs is supported by valid analysis and is consistent with organisation’s business performance objectives
3. Prepare cost reports and budgets
   • Obtain cost information advice from all sections of organisation when formulating cost reports and budgets
   • Ensure structure and format of budgets are clear and comply with management information requirements and organisational practices
4. Analyse variances and review costing system integrity
   • Calculate and analyse variances against budget
   • Ensure reports are accurate, comprehensive and comply with management information requirements and organisational practices
   • Use variance analysis to review effectiveness of cost assignment processes

Performance Evidence

Evidence of the ability to:

gather and record operating and cost data in accordance with organisational policy and procedures

analyse data and assign costs to products, services and organisational units to comply with organisational procedures

obtain data and prepare a range of cost reports and budgets to meet management information requirements

analyse variances between budgeted and actual data, and review integrity of costing systems.

Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.

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Knowledge Evidence

To complete the unit requirements safely and effectively, the individual must:

identify and describe cost behaviour characteristics for the different cost elements of a product or service

describe the principles of double-entry bookkeeping and accrual based accounting

identify and discuss the key features of organisational policy and procedures as they apply to costing systems

outline the key management information requirements

identify and explain the key principles and practices of budget preparation

discuss the relationship between variance analysis and costing system integrity

explain the key processes and procedures for recording and securely storing data.

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