concept of costing, including fixed and variable costs

Elements describe the essential outcomes of a unit of competency.

Performance criteria describe the performance needed to demonstrate achievement of the element. Where bold italicised text is used, further information is detailed in the required skills and knowledge section and the range statement. Assessment of performance is to be consistent with the evidence guide.

1. Access and interpret financial information.

1.1 Identify and interpret the range of financial information  and reports  required for the organisation to monitor business performance.

1.2 Interpret financial information and reports applicable to operational or departmental activities.

2. Use and provide financial information.

2.1 Review financial information for impacts on operational activities and take action according to individual empowerment.

2.2 Routinely provide information on operational or departmental financial activities .

This section describes the skills and knowledge required for this unit.

Required skills 

• literacy skills to:

• read and interpret a wide range of financial documents
• write explanatory notes to accompany financial information

• numeracy skills to interpret and use financial records and to calculate entries within financial reports
• planning and organising skills to prepare information within designated timelines
• problem-solving skills to identify and resolve financial reporting discrepancies
• technology skills to use accounting software packages.

Required knowledge 

• for the specific industry sector and organisation:

• financial terminology, including average spend, cover, wastage and nett costs
• reporting periods, including different financial years observed by different businesses
• the features and functions of accounting software programs used to manage financial operations
• use of financial information and reports in monitoring overall business performance

• key elements of financial record-keeping and key terminology, including:

• ledgers, subsidiary ledgers and journals
• transactions, receipts and disbursements
• invoices, accounts payable, debtors and creditors
• cash flow

• key elements of accounting and how it provides information for business management, including:

• charts of accounts and account categories, such as assets, liabilities, equity, cost of sales, income and expense
• basic rules for double-entry accounting and the concept of debits and credits
• accrual versus cash accounting
• profit and loss statements and balance sheets as key financial statements used to measure business performance, including their role; how these reports are generated; and the format, features and key information
• reconciliations, including purpose, different types of reconciliation and the impact of unpresented cheques, bank charges, direct debits and credits on reconciliations
• concept of costing, including fixed and variable costs
• accounting for and reporting Goods and Services Tax (GST).