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ACCAACCA MA Cheat Sheet: Costing, Budgeting and Variance Formulas
ExpertMinds Editorial·3 June 2026·7 min read
Practice ACCA questions while you read →Key fact:MA exam: on-demand CBE · 100 marks · 2 hours · Section A 35 OT questions (35 marks), Section B 3 OT cases (30 marks), Section C 2 constructed response questions (35 marks). Pass mark 50%.
Cost Classification and Behaviour
| Concept | Formula / Key point |
|---|---|
| Total cost | Fixed costs + Variable costs |
| Variable cost per unit | Change in total cost / Change in output |
| High-low method | (High cost − Low cost) / (High units − Low units) = variable cost per unit |
| Contribution | Selling price − Variable cost per unit |
| Contribution margin ratio | Contribution / Revenue × 100% |
Absorption vs Marginal Costing
| Item | Absorption costing | Marginal costing |
|---|---|---|
| Fixed production OH | Included in unit cost | Period cost — written off in full |
| Inventory valuation | Higher (includes fixed OH) | Lower (variable cost only) |
| Profit when production > sales | Higher (fixed OH deferred in closing inventory) | Lower |
| OAR formula | Budgeted fixed OH / Budgeted activity level | — |
| Under/over absorption | Absorbed OH − Actual OH (positive = over) | — |
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Break-Even Analysis
| Measure | Formula |
|---|---|
| Break-even point (units) | Fixed costs / Contribution per unit |
| Break-even point (revenue) | Fixed costs / Contribution margin ratio |
| Margin of safety (units) | Budgeted sales − BEP units |
| Margin of safety (%) | (Budgeted sales − BEP) / Budgeted sales × 100% |
| Target profit (units) | (Fixed costs + Target profit) / Contribution per unit |
Standard Cost Variances
| Variance | Formula | Favourable when |
|---|---|---|
| Material price | (Standard price − Actual price) × Actual quantity purchased | Actual price < Standard price |
| Material usage | (Standard quantity for actual output − Actual quantity used) × Standard price | Used less than standard |
| Labour rate | (Standard rate − Actual rate) × Actual hours paid | Actual rate < Standard rate |
| Labour efficiency | (Standard hours for actual output − Actual hours worked) × Standard rate | Worked fewer hours than standard |
| Sales volume | (Actual sales volume − Budgeted volume) × Standard profit/contribution per unit | Sold more than budget |
Watch out:Fixed overhead volume variance only exists in absorption costing. Under marginal costing, the only fixed overhead variance is the expenditure variance (Budgeted fixed OH − Actual fixed OH).
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