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Unit 6 Recording and evaluating costs and revenues

This unit is about recording, analysing and reporting on costs and revenues. It includes how information on costs and revenues is built up.

You are required to obtain 2 of the 3 elements

Element objective	Example activities to demonstrate competence
6.1 Record and analyse information relating to direct costs and revenues This is about identifying direct costs and revenues, the recording and analysis of direct costs and revenues.	Identifying and noting costs of materials, labour and other direct cost items Identifying different sources of revenue Analysing costs and revenues Checking cost information for inventories held Checking the analysis of costs and revenues for reasonableness (audit) Inspecting cost/revenue information (audit).
6.2 Record and analyse information relating to the allocation, apportionment and absorption of overhead costs This is about identifying overhead costs, allocating and apportioning them.	Identifying overheads and attributing them to cost centres Calculating absorption rates Making adjustments where overheads are recovered or exceeded Checking stock costing calculations and vouching to supporting documentation (audit) Compliance testing of policies on overheads (audit).
6.3 Prepare and evaluate estimates of costs and revenues This is about using costs and revenue information to support decision taking	Identifying and recording information relevant to estimating future costs and revenues Preparing estimates of future income and expenditure Analysing factors affecting costs and revenues Providing assumptions used in calculating estimated costs and revenues Identifying and suggesting options on costs and revenues.