7/31/2019 2012 DEC Bpp Assessment of f5

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ACCA F5 PAPER REVIEW

Posted by Blog Editor in Accountancy & Tax, 09.08.2012

ACCA Paper F5: Performance Management

June 2012 Exam Commentary

GENERAL IMPRESSIONThere was a slightly greater proportion of discussion marks (52%) in this paper that might have been expected, this

should have benefited students as these questions are generally less time pressured and more straightforward. The

paper didnt contain many of the core F5 topics and it is therefore likely to have been hard for students who had

revised selectively. Those students who were well prepared and approached the exam logically, identifying the easier

marks first should have done well.

Q1: Make or Buy

Q2: Target Costing

Q3: Forecasting & Budgeting

Q4: Variance analysis & standard costing v TQM

Q5: ROI & RI

QUESTION REVIEW

QUESTION 1 MAKE OR BUY

Part (a) 8 marks calculation of costs to make internally v given cost to buy in, with conclusion

Part (b) 7 marks determination of the optimal mix of products to make and buy given a labour constraint

Part (c) 5 marks Non-financial factors to take into consideration when outsourcing

Part (c) contained some very easy marks, as there were lots of hints in the question about the potential difficulties.Clear workings in (a) would have maximised the easy marks. Part (b) involved using limiting factors to make a

decision.

QUESTION 2 TARGET COSTING

Part (a) 6 marks Steps involved in target costing in a manufacturing environment

Part (b) 4 marks Characteristics of a service industry

Part (c) 4 marks Explaining how to derive target costs in a hospital for 2 situations

Part (d) 6 marks Difficulties in using target costing in a hospital

This was the only fully written question on the paper and it contained some of the easiest and most challengingmarks. Parts (a) and (b) were straightforward knowledge and should not have presented any problems. The final two

parts were challenging and it is likely that students would have felt uncertain about applying their knowledge of target

costing to a hospital situation.

QUESTION 3 FORECASTING & BUDGETING

Part (a) 10 marks Forecasting sales using the multiplicative model

Part (b) 10 marks Impact of poor budgeting on staff and business

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The detail in the calculations needed in (a) may have been a surprise and could have proved time pressured. The

discussion in (b) should have been relatively straightforward.

QUESTION 4 VARIANCE ANALYSIS & STANDARD COSTING V TQM

Part (a) 12 marks Reconciliation of budgeted contribution to actual contribution, showing all the variances.

Part (b) 8 marks Discussion of the view that there is no longer a place for standard costing if TQM is introduced

The variances required in (a) included a planning and operation variance, though this was not explicitly asked for and

may have been missed. Otherwise the calculations were fairly basic here. Many candidates would have found it a

challenge to find sufficient content for part (b).

QUESTION 5 ROI AND RI

Part (a) 2 marks Calculation of ROI for 2 divisions

Part (b) 3 marks Calculation of RI for 2 divisions

Part (c) 6 marks Discussion of the performance of the 2 divisions

Part (d) 5 marks Calculation of ROI and RI if new investment is undertaken

Part (e) 4 marks Behavioural problems which can arise from using net profit rather than controllable profit.

This was a nice straightforward end to the exam and students who had learned the definitions of ROI and RI as well

as the potential problems arising from dysfunctional behaviour would have scored well here.